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Uganda’s oil has not been sold ‑ govt

By Tracy Gwambe

Added 13th November 2019 04:33 PM

Oil companies are not selling the oil, what is being transferred is purely the test crude.

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Oil companies are not selling the oil, what is being transferred is purely the test crude.

A week ago, the Petroleum Authority of Uganda hosted a knowledge-sharing seminar and field tour for social media influencers.

Below is my experience over the two days in the Albertine Graben.


Starting with a workshop in Kampala, the Petroleum Authority of Uganda, (PAU) got media personalities, social media influencers and other stakeholders up to speed on the activities in the oil industry.

The purpose of the seminar was to dispel any speculation about the oil sector and allegations that oil is being sold secretly. 



Highlights


At Kasamene 1 in the Tilenga project area sits bitutainers containing 15,000 barrels of the 45,000 barrels of test crude oil stored in the Albertine region. Other bitutainers are stored at four sites including Tangi Camp in Nwoya district.

“There is no investor who will attempt to buy and ferry this test crude on trucks and get profits out of it.

This is impure crude oil, which needs to be processed in order to get it into a state that we can be able to sell to the international market, where we can refine it.

This is in addition to the cost of handling and transportation given the waxy nature of the crude,” Felix Ocitti, a senior petroleum geoscientist at Petroleum Authority of Uganda, said.

 

“Ten or about 15 years ago, we would have decided to flare (burn the crude oil), but several jurisdictions, including Uganda, do not encourage flaring as this is not environmentally friendly,” Ocitti said.

The Uganda National Oil Company (UNOC) spokesperson, Ibrahim Kasita, informed the team that UNOC, being the agency handling the oil business on behalf of the Government, chose to monetise the crude.

 

Before selling the test crude oil, UNOC embarked on a process of identifying a buyer. They advertised both locally and internationally, a process that saw different companies showing interest in buying the test crude. When the evaluation process is done, an announcement about which company is buying the crude oil will be made.

However, before this happens, a report that will be sent to the energy ministry is being made, and when accepted, the press will be invited and the company buying the crude will be announced.


“Nothing has been sold. Everything is intact,” Kasita said. Ocitti said PAU is ready to host anyone who wants to check out the crude in question at the different storage facilities in the Albertine region.

Oil companies are not selling the oil, what is being transferred is purely the test crude, which has been kept at the different locations since 2012. One might wonder what crude oil is. 

“The test crude are samples acquired during the appraisal phase between 2009 and 2013. During an appraisal phrase, (a phase between exploration and field development), when the first discovery well is drilled, the company is not in a position to tell details of the oil as details are scanty.

It is during this phase that companies involved in exploration determine the production rates, quantity, quality and extent of the oil field,” Gloria Sebikari, PAU corporate affairs and public relations manager, said.

Uganda Petroleum Institute, Kigumba

The petroleum authority took the team to Uganda Petroleum Institute, Kigumba (UPIK), whose mission is to provide world-class education in geosciences and petroleum engineering in order to support and advance the petroleum sector.


According to Oscar Muhumuza, a lecturer at the institute, UPIK currently offers three diploma programmes; petroleum engineering, upstream petroleum operations and downstream petroleum operations.

The institute has specific interventions to attract female students, whose enrolment is less than that of male students.

“We are now targeting secondary schools, which we visit and interest girls in taking up the courses,” Muhumuza said, who also pointed out another challenge faced by the institute being on job training placements, where the delays in final investment decision have created a shortage of placements for the students who have graduated.

As Ugandans wait for first oil, the activity in the Albertine has brought a lot of improvement in the region.

 

Roads have been constructed, better living conditions have been opened to the communities of affected and compensated persons, as well as the construction of health centres, institutions and schools. Over 580km of roads in total will be tarmacked in the Albertine region.

“When we came here in 2012, there were no roads and the transport was by boat and, at times, the team would park their cars up the escarpment and move a distance of about 7km on foot.

China National Offshore Oil Corporation (CNOOC) Uganda Limited and the Government did all it took to have this road in place,” Micheal Weteeka said.

The airport another key project in the Albertine region is the Hoima International Airport.

 

Construction works on the Kabale International Airport commenced last year, with the airport sitting on part of the 29.7 square km of land in the industrial park. It will have a runway up to in 5km length and 45 metres of the width.

The project is being handled by SBC, an Israeli firm. According to Amos Muriisa, the SBC public relations officer, the airport whose work has been covered by 31% is expected to start operating in 2022, even though works might go on until 2023.

He says 38% of the workforce at the airport is constituted of locals, beating the initial local content target of 30%.

Vocational institutes in the region have been advised to train students in skills that are required by the job market.

The media team also visited EnviroServ, a facility that came into effect in 2013. The facility, which was licensed by the Government of Uganda to dispose of oil and gas waste, among other waste products, is in charge of conserving of the environment.

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