By Ibrahim Kasita
GOVERNMENT will utilize its discovered petroleum resources to create green gold from the black gold. This was revealed by Eng. Irene Muloni, Uganda’s Minister of Energy and Mineral Development while addressing delegates attending the CERA WEEK 2014, IHS Energy’s annual executive conference that was held in Houston, Texas USA.
“Uganda is an agricultural country and we will use the revenues from this natural resource to create lasting value through upgrading our infrastructure, mechanizing agriculture, increasing access to energy for the population and protecting our environment,” Eng. Muloni said.
Uganda has proven petroleum resources currently estimated at 3.5billion Barrels of oil in place. The discovery was made in 2006 in the Albertine Graben.
In her remarks Eng. Muloni noted that it is an exciting time for Uganda with significant progress being made in the oil and gas sector.
“The finding cost for oil in Uganda is US $1 per barrel which is one of the lowest in the world. This coupled with a drilling success rate of above 85% makes Uganda an attractive destination for investment,” she added. World over, the drilling success rate averages between 10% and 30%.
Government of Uganda recently signed a Memorandum of Understanding with the Licensed Oil Companies operating in the country on the commercialization plan for the discovered petroleum resources in the Albertine Graben.
The plan includes the use of petroleum for power generation, supply of Crude Oil to the refinery to be developed in Uganda and export of Crude Oil through an export pipeline or any other viable options.
“We are in the process of developing a 60,000 barrels per day refinery through a Public-Private-Partnership and the selection of a lead investor to partner with Government is underway and will be completed mid-2014.”
Three oil companies, Tullow, Total and CNOOC are currently licensed to undertake oil exploration in Uganda’s Albertine Graben with CNOOC already having a production license.
The Uganda Parliament recently passed two pieces of legislation that among other things, provide for licensing through open competitive bidding rounds and the establishment of a regulatory institution and a National Oil Company.
“Recoverable resources stand at 1.7 billion barrels from only 40% of the area with potential. Licensing rounds for unlicensed acreage, starting with areas that have good data coverage will be held in 2014/15. The potential for additional resources in the country is a reality” Eng. Muloni explained.