By Ibrahim Kasita

UGANDA’S oil and gas reserves discovered so far at the Albertine Graben are about one billion barrels, Tullow Oil and Gas’ top engineer has disclosed.

Tullow and Heritage Oil are the firms exploring for oil and gas in the Lake Albert rift basin.

Nadeem Hashmi, the Tullow well engineering manager, said that with many more prospects to drill in the Butiaba region and across the base, the commercial threshold for development would be exceeded.

“The region has about one billion reserves of crude oil. This makes the project commercially-viable,” Hashmi said.

The wells discovered with potential of producing huge amounts of crude oil include: Mputa-1, Mputa-3, Mputa-4, Mputa-5, Warthog-1, Ngassa, Waraga-1, Kingfisher 1, 2 & 3, Nzizi-1, Kasamane, Ngege-1, Taitai-1 and Buffalo.

Analysts say that for a project to be commercially- viable, the reserves should be above 400 million barrels.
Therefore, the oil reserve estimates can facilitate full development and exportation for the international market.

Tullow has assigned a team to make a commercial development plan for the whole basin.

The oil discoveries will require a 1,300km pipeline to be built to the Kenyan port of Mombasa at a cost of between $1.5b and $2b.

Aidan Heavey, the Tullow chief executive officer, recently said: “2009 promises to be a landmark year for Tullow, Heritage and the Government as we work together to realise the region’s oil potential.”

Already, the Government and Tullow have agreed on an early production scheme that will be conducted in Kaiso-Tonya. It will involve production of 4,000-5,000 barrels of oil per day and construction of 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 has partnered with Jacobsen Elektro to build and operate the thermal plant. It has applied to the Electricity Regulatory Authority for a generation licence.