Status of Uganda's oil & gas Sector Status of Uganda's oil & gas Sector Towards the Development Stage, Opportunities Towards the Development Stage, Opportunities for Ugandans for Ugandans Presented at: A WORKSHOP ORGANIZED BY MYJ FOR NWOYA STAKEHOLDERS By: Catherine Bekunda Directorate of Petroleum Kolping Hotel, MASINDI July 7, 2015 1
PRESENTATION OUTLINE 1. Introduction 2. Update on specific projects 3. Development of Uganda ’ s Discoveries. 4. Projects in the Development Stage 5. Opportunities for Ugandans 6. Challenges and Way forward 7. Conclusion 2 Petroleum Exploration and Production Department Petroleum Exploration and Production Department
1. INTRODUCTION 1. INTRODUCTION 1.1 Petroleum Value Chain; LICENSING EXPLORATION UPSTREAM DEVELOPMENT PRODUCTION TRANSPORTATION MIDSTREAM REFINING GAS PROCESSING DISTRIBUTION DOWNSTREAM MARKETING SALES Petroleum Exploration and Production Department 3
2.Update on specific projects (1) 2.Update on specific projects (1) 2.1 Licensing • In February 2015, Uganda announced a new competitive licensing round • The round will cover six blocks namely: � Turaco Block in Ntoroko district-425 Sq.Km � Kanywantaba Block in Ntoroko district-344 Sq.Km � Taitai & Karuka Block in Buliisa district – 565 Sq.Km � Ngassa Block in Hoima district – 416 Sq.Km � Ngaji Block in Kanungu and Rukungiri districts – 895 Sq. Km � Mvule Block in Moyo and Yumbe districts – 344 Sq. Km • 17 companies have submitted statement of qualification to Government for evaluation. 4
2.Update on specific projects (2) 2.Update on specific projects (2) 2.2 Land Access and Acquisition Process The land access and acquisition procedures for oil and gas activities is dictated by the phase in the value chain as follows; • Exploration phase: during this phase land is required on a temporary basis for seismic surveys, well drilling, access roads among others. Hence land owners or users are paid rent for deprivation of their land use. • Development and Production phases: These phases require land to be acquired for transportation corridors, pipelines, central processing facilities, well pads, camps among others. This requires land to be acquired on a long term basis. Consequently, resettlement and compensation is necessitated. 5
2.Update on specific projects (3) 2.Update on specific projects (3) 2.2.1 Ongoing Resettlement and Compensation Activities a) Land acquisition for the refinery • Acquisition of 29.57km 2 of land in Kabaale, Buseruka in Hoima for the construction of an oil refinery nearing end. • 95% of the PAPs who opted for cash compensation already paid. • 533 acres for resettlement of the 93 PAPs has been acquired • Physical planning for the resettlement land were finalized by Ministry of Lands Housing and Urban Development • Cadastral survey and demarcation of the individual parcels for the PAPs is now ongoing • 93 PAPs will have access to their individual land parcels and will be free to commence agricultural activities • Finalising procurement of a contractor to construct the houses and the social infrastructure for those to be resettled. 6
2.Update on specific projects (4) 2.Update on specific projects (4) b) Land acquisition in the Kingfisher Development Area • CNOOC the operator of the Kingfisher Development Area commenced the process of acquiring land for the development of infrastructure. The land is for well pads, Central processing facility, camps, access roads, airstrip, escarpment road, among others. c) Temporary land access and compensation in EA 1/1A & EA 2 • Total E & P Uganda, the operator of EA 1 /1A and Tullow Uganda Operations Ltd , the operator of EA 2 have had temporary access to land. Hence land owners or users are paid rent for deprivation of their land use . This has been the case mainly for land hosting Exploration and appraisal wells, access roads, and camps. • Retrospective rental compensation is on going in EA 2 Buliisa area, Completed in EA 1/1A except over Mpyo 6, Ngiri 7, Ngiri 4, Ngiri 1 and Gunya-2 well pads because of land ownership disputes 7
2.Update on specific projects (5) � 12 m of wide strip of land centered along the pipeline route to be permanently acquired. Can be wider for future pipeline developments � 24 m of wide strip of land required temporarily for construction period (movement of materials and equipment) � Government has procured a consultant to carry out � Detailed Route Survey and Environmental Baseline Study for Hoima – Kampala product Pipeline � RAP Study and its implementation Other Routes for Crude Export Pipeline under consideration � South Tanzania Route to Tanga � North Kenya Route to Ras Tenewi near Lamu � South Kenya Route to Las Ngomeni near Mombasa 8
2.Update on specific projects (6) 2.Update on specific projects (6) b) Field development • Land will be required for the development of facilities in the different fields for the production of oil and gas. • The fields that are on stream to progress to development are EA 1 and EA 2. The land requirement for permanent take is for the construction of a central processing facility, pipelines, flow lines, access roads, camps and well pads. • TUOP and TEPU have procured a consultant to undertake the RAP studies 9
3. DEVELOPMENT OF UGANDA ’ S DISCOVERIES . DEVELOPMENT OF UGANDA ’ S DISCOVERIES 3.1 Discoveries; � Total of 21 discoveries made so far. � 6.5b bbl of resources. � Estim. 1.4b recoverable. 10 Petroleum Exploration and Production Department
3 . Development of Uganda ’ s Discoveries . Development of Uganda ’ s Discoveries (2) (2) 3.2 Status of the 21 Discoveries; � 4 discoveries returned to Government; Turaco, Ngassa, Karuka and Taitai. � 1 Production License issued to CNOOC Uganda Ltd; Kingfisher. � 12 Applications for Production Licence being reviewed; KW, KNNN, MNW by Tullow and Ngiri, Jobi-Rii by Total E&P. � 4 FDPs submitted in December 2014; Gunya, Mpyo, Jobi East and Lyec by Total E&P. � Only Kingfisher Discovery into Development stage today. 11 Petroleum Exploration and Production Department
4 . PROJECTS IN DEVELOPMENT STAGE . PROJECTS IN DEVELOPMENT STAGE 4.1 Activities planned during Development a) Refinery Development � 60kbopd refinery phased starting with 30kbopd. � PPP between GoU and lead investor with option for EAC partner states to participate. � Feasibility study finalized and Land acquisition ongoing. � Lead investor selection process in final stages with RT Global Resources as the best preferred bidder and SK Energy resources as the alternate preferred bidder. � Anticipated that construction will start 2015 and first phase of refinery will be ready 2018. � Over 5,000 workers expected during construction and about 500 during normal operations. � Lots of imports expected for construction. 12 Petroleum Exploration and Production Department
4 . Projects in Development Stage . Projects in Development Stage (2) (2) b) Upstream Facilities Construction - CPF � Two CPFs expected. One in Kingfisher and another in Buliisa. Kingfisher � CPF to process crude from Kingfisher and that from Kaiso – Tonya. � CPF will generate about 35MW of electricity from associated gas for heating of pipelines, pumping of crude, well power, general CPF and camp requirements. � Kingfisher excess associated gas to be used in LPG and power to National grid. 13 Petroleum Exploration and Production Department
4 . Projects in Development Stage . Projects in Development Stage (3) (3) Buliisa � CPF to process crude from South and North of the Nile. To be shared between Tullow and Total with Total as operator. � CPF to have four trains to cater for different properties of Crude. � Power to be generated at location estimated at 70MW for heating of pipelines, pumping of crude, well power, general CPF and camp requirements. � Studies on use of excess associated gas is ongoing. � Storage tanks for crude must be built. 14 Petroleum Exploration and Production Department
4 . Projects in Development Stage . Projects in Development Stage (4) (4) c) Other Upstream Facilities Construction � Feeder pipelines from different wells to CPF � Temporary and permanent operational camps � Water intake facilities � Well pads � Above ground installations � Lots of manpower will be required during these projects . d) Export pipeline Construction � 1/3 in Uganda and 2/3 in Kenya of the 1300km pipeline � About 600m of pipeline installation per day. � Minimum of three crews for construction. 15 Petroleum Exploration and Production Department
4 . Projects in Development Stage . Projects in Development Stage (5) (5) e) Drilling � About 700 wells expected in total � Deviated wells with many wells at one pad � Rigs sliding with 9 rigs at peak � 80 people per rig on average. � Drilling continuous starting 2016. f) Operations � About 6 months of mobilization before production. � Manpower required for operating CPF, Well intervention and work over and monitoring reservoir during production � Export pipeline operations will need about 200 people. 16 Petroleum Exploration and Production Department
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