Heritage Oil & Gas employees at work in one of the exploration sites in western Uganda

By Ibrahim Kasita

UGANDA’S oil and gas deposits are moving closer to commercial threshold after another large oil well was discovered in the Albertine Graben region.

Heritage Oil, the firm exploring oil and gas in western Uganda, on Tuesday announced another discovery of oil and gas in its Warthog-1 exploration oil well.

“The well encountered a gross hydrocarbon-bearing interval of approximately 150 metres in thickness, with net hydrocarbon pay of 46 metres,” the firm said in a statement.

“Wireline logging and formation pressure measurements indicate 31 metres of net oil pay in the principal oil-bearing reservoir section, overlain by 15 metres of additional net hydrocarbon pay comprising, most probably, volatile oil, condensate and wet gas.”

Energy experts believe that the new discovery is moving towards the right threshold of above 400 million barrels of reserves in the Lake Albert fields that would make the project commercially viable. Warthog-1 is the first well in a three-well exploration programme to be drilled in Block 1.

Others will include Giraffe and Buffalo prospects in block 1 which is estimated in the range of 40-50 million barrels of oil per day.

The Lake Albert discoveries would require a 1,300km pipeline to be built to the Kenyan port of Mombasa at an estimated cost of between $1.5b and $2b.

Already the Government and Tullow Oil have agreed on an early scheme, which will be conducted in Kaiso-Tonya, including the production of 4,000-5,000 barrels of oil per day and a mini-refinery, which will produce diesel, kerosene and heavy-fuel diesel.

It will also include a 50-85MW heavy-fuel oil thermal plant, a transmission line from Mputa to Fort Portal and Nkenda and a distribution power network from Kaiso-Tonya to Hoima.

Tullow Oil has partnered with Jacobsen Elektro to build and operate the thermal plant. It has applied to the Electricity Regulatory Authority for a generation licence.

Tullow plans to invest over $200m (about sh328b) in exploration this year.
This money will be used for onshore and offshore drilling, seismic surveys and the early production scheme.

The scheme is also targeting large oil reserves in order to exceed the threshold required for full development and exportation for the international market.

However, Tullow has said its local projects might not come on stream until 2015.