More oil found, 17 new wells for Tullow.
While expectations on the sharing of oil revenues continue to build, most Ugandans will be pleased to know of additional discoveries of oil in Nwoya district in the Acholi sub-region by French oil and gas company Total SA.
The discovery comes in the aftermath of seismic studies around the Murchison falls area by its Ugandan operations, Total Exploration and Production (Total E&P) in September 2012.
Ernest Rubondo, the Commissioner for petroleum in the ministry of energy confirmed the discovery to the media early this week.
Ernest Rubondo, the commissioner for petroleum in the ministry of energy confirmed the discovery to the media early this week, adding that details are set to be disclosed by the energy minister Irene Muloni at the ongoing NRM retreat in Kyankwanzi.
“They (Total) told us that they have encountered shows, and we are waiting for more information. The Government will make an announcement in due course,” he told Oil in Uganda, a sector publication.
He added that details about the volume and its commercial viability may be ready in about three weeks after analysis has been completed.
When contacted, Ahelem, the Total E&P corporate affairs manager said the Total headquarters in Paris are set to release an official statement confirming the discovery.
Richard Todwong, the Nwoya area member of parliament told the media that the district has about four to five wells confirmed to have oil adding that indications are that the area could be destined for additional discoveries.
Less than 40% of Uganda’s total oil potential has yet been appraised, and further discoveries are more than likely.
Oil well appraisals are the next phase after discovery. Appraisals are more extensive drilling programmes that assess the characteristics of the field, including its flow rate.
The process gives a more accurate estimate how much more or less oil there could be in a particular oil field.
In a separate incident, Tullow oil successfully tested an additional oil well, code named Lyec-1 in the northern Albertine graben in December 2012 but details of the discovery are yet to be formally announced.
According to Tullow’s 2013 trading statement and operational update, the Lyec-1 oil well was used to successfully test the northern extent of the Jobi East accumulation encountering oil pay, which is currently under evaluation and re-mapping.
“A significant amount of exploration and appraisal drilling activity remains in 2013, as detailed in the attached schedule with the partners seeking to add further to the discovered resources,” the report reads in part.
The company hit three dry wells in a wildcat exploration exercise to define the ultimate basin potential ahead of potential relinquishments.
Tullow tested Riwu-1 in the far northwestern limits, Raa-1 in the northern extent, and Til-1 in far northeastern limits and did not encounter commercial hydrocarbons.
Recent drilling activity has already pushed the drilled oil wells from 77 to approximately 82, the cost of drilling in Uganda slightly over $1.5b or less a dollar per barrel, way below the benchmark $20 per barrel.
Over 17 oil wells to be appraised
Aidan Heavey, the group Tullow Oil chief executive reveals that the company intends to drill 40 additional oil wells globally this year with 17 oil wells in Uganda alone.
This will bring the total Tullow oil wells in Uganda to 63, with 33 sucessful wells out of a total 46 exploration and appraisal wells drilled by the company.
The oil company is looking to increase group working production to 92,000 barrels of oil per day in 2013 from 79,200 barrels per day in 2012 improving the company’s $3.5b (sh9.5 trillion) reserves.
“We (also) significantly strengthened our balance sheet in 2012 by concluding the Uganda farm-down and by refinancing and extending the maturity of our $3.5bn reserves based lending facility,” Heavy said.
Heavey noted that two frontier discoveries at Ngamia-1and Twiga South-1 in Kenya alongside successful exploration in Uganda have established East Africa as a new energy hub.
Rubondo caused excitement at a conference last year when he revealed that Uganda’s oil reserves had increased to 3.5 billion barrels and could, with luck, peak at ten billion barrels of oil.
Refinery project on track
Headway is being made in the construction of the petroleum refinery in Buseruka, Hoima district after the chief government valuer okayed resettlement plans by the Ministry of Energy.
Some 7,000 residents in fourteen villages around the area are to be relocated under the Resettlement Action Plan (RAP) to pave way for the 60,000 barrels per day refinery.
“We have received approvals for the resettlement action plan by the chief government valuer,” Bukenya Matovu, the ministry of energy publicist told New Vision.
While the plan may have been okayed in principle, Bashir Hanji, an officer with the refinery project says the exact amount to be spent on compensation of affected residents is still unknown pending receipt of official letters to that effect.
“The chief government valuer is supposed to ensure that compensation amounts are fair to both the government and the residents.
He is supposed to carry out independent assessments and write a report. We are yet to receive his report,” he said.