Early oil production scheme to change
Apr 20, 2009
TULLOW Oil is “reconsidering†its development strategy for the early oil production scheme after discovering huge amounts of oil and gas, a move that will further delay the scheme.
By Ibrahim Kasita
TULLOW Oil is “reconsidering†its development strategy for the early oil production scheme after discovering huge amounts of oil and gas, a move that will further delay the scheme.
The early production scheme, which was supposed to start this year, was pushed to the last quarter of next year. It was supposed to produce 4,000-5,000 barrels of oil per day (bpd) of heavy fuel oil and petroleum products from the Mputa oil wells.
Tullow said in its 2008 annual report estimates that 600 million barrels of oil had been discovered in the region to date.
Uganda is in urgent need of the early production scheme in order to boost generation of thermal power, end loadshedding and lower electricity tariffs.
Also, the scheme will end the fuel shortage. It will save about $600m (sh1,212b) per year, which Uganda spends on importing petroleum.
“An integrated team is in place to define the optimum development scenario for the Albertine Basin. Whilst this work is still in the early conceptual stages, it is anticipated that it will result into a phased development plan,†the report stated.
Paul McDade, the chief operating officer, last month said in the new plan, daily output would start at about 500 bpd and be limited to 2,000 bpd or “a bit more†for the first three years.
He said the output would rise to 20,000 bpd in three to five years and reach 100,000 to 150,000 bpd within 10 years. “Production will be low-cost and efficient,†he added.
Experts said the development would drag the early production scheme as Tullow tries to devise opportunities of making profits from the discovered hydrocarbons.
A proportion of the heavy fuel oil will be utilised in a local power generation plant, with the balance and the petroleum products exported by trucks to the local market.
The proposed early production scheme, which will be conducted in Kaiso-Tonya in Hoima, comprises a 57MW thermal plant, a transmission line from Mputa to Fort-Portal and a distribution network from Kaiso-Tonya to Hoima.
In its 2008 annual report released this month, Tullow said the recent economic and risk assessment for the previous planned early production scheme, which concentrated on the development of Mputa oil fields, was being incorporated into the new plan.
“Early production from one or more fields will remain an integral part of the development plan,†read the report.
“The initial phase will involve production from a small number of wells to provide early production data and crude for the local market.â€
Tullow plans to expand the early production phase to provide more significant production volumes for the local and regional fuel oil and oil products market.
“The final phase is expected to involve construction of a 1,300km pipeline to the Indian Ocean to allow export of the resource base volumes which significantly exceed local and regional demand,†it stated
Aidan Heavey, the Tullow chief executive, said: “For 2009, the group is focussing on progressing Phase 1 of the Jubilee project in Ghana, fast-tracking the commercialisation of Ugandan reserves and executing selective high-impact exploration and appraisal campaigns.â€
“The group is in a strong position, from an operational and financial perspective, to deliver these transformational projects as we move into our next phase of growth,†he said.
“In Uganda, we have exceeded the commercial threshold for development through a series of world-class discoveries, with more to come in this region from a strong portfolio of high quality drilling prospects,†Heavey explained.
Tullow intends to present these plans to the Government this year.
TULLOW Oil is “reconsidering†its development strategy for the early oil production scheme after discovering huge amounts of oil and gas, a move that will further delay the scheme.
The early production scheme, which was supposed to start this year, was pushed to the last quarter of next year. It was supposed to produce 4,000-5,000 barrels of oil per day (bpd) of heavy fuel oil and petroleum products from the Mputa oil wells.
Tullow said in its 2008 annual report estimates that 600 million barrels of oil had been discovered in the region to date.
Uganda is in urgent need of the early production scheme in order to boost generation of thermal power, end loadshedding and lower electricity tariffs.
Also, the scheme will end the fuel shortage. It will save about $600m (sh1,212b) per year, which Uganda spends on importing petroleum.
“An integrated team is in place to define the optimum development scenario for the Albertine Basin. Whilst this work is still in the early conceptual stages, it is anticipated that it will result into a phased development plan,†the report stated.
Paul McDade, the chief operating officer, last month said in the new plan, daily output would start at about 500 bpd and be limited to 2,000 bpd or “a bit more†for the first three years.
He said the output would rise to 20,000 bpd in three to five years and reach 100,000 to 150,000 bpd within 10 years. “Production will be low-cost and efficient,†he added.
Experts said the development would drag the early production scheme as Tullow tries to devise opportunities of making profits from the discovered hydrocarbons.
A proportion of the heavy fuel oil will be utilised in a local power generation plant, with the balance and the petroleum products exported by trucks to the local market.
The proposed early production scheme, which will be conducted in Kaiso-Tonya in Hoima, comprises a 57MW thermal plant, a transmission line from Mputa to Fort-Portal and a distribution network from Kaiso-Tonya to Hoima.
In its 2008 annual report released this month, Tullow said the recent economic and risk assessment for the previous planned early production scheme, which concentrated on the development of Mputa oil fields, was being incorporated into the new plan.
“Early production from one or more fields will remain an integral part of the development plan,†read the report.
“The initial phase will involve production from a small number of wells to provide early production data and crude for the local market.â€
Tullow plans to expand the early production phase to provide more significant production volumes for the local and regional fuel oil and oil products market.
“The final phase is expected to involve construction of a 1,300km pipeline to the Indian Ocean to allow export of the resource base volumes which significantly exceed local and regional demand,†it stated
Aidan Heavey, the Tullow chief executive, said: “For 2009, the group is focussing on progressing Phase 1 of the Jubilee project in Ghana, fast-tracking the commercialisation of Ugandan reserves and executing selective high-impact exploration and appraisal campaigns.â€
“The group is in a strong position, from an operational and financial perspective, to deliver these transformational projects as we move into our next phase of growth,†he said.
“In Uganda, we have exceeded the commercial threshold for development through a series of world-class discoveries, with more to come in this region from a strong portfolio of high quality drilling prospects,†Heavey explained.
Tullow intends to present these plans to the Government this year.