Article posted by UKTI Digital, for UK Trade & Investment
6 September 2013

Oil & Gas sector in Uganda

Oil & Gas sector in Uganda

With over 80 oil wells drilled, a success rate of 87% and 3.5 billion barrels of oil in place, Uganda has become an exciting frontier for oil exploration and potential development and production presenting great opportunities to UK companies.

Market overview

The first commercial discovery of oil in Uganda was made in 2006. Twenty (20) oil and/or gas discoveries have since been made, with five of these now at Field Development Stage. To date over 80 deep wells have been drilled, 72 encountering hydrocarbons in the sub-surface – a 87% success rate. Current oil estimates are at 3.5 billion barrels of oil with estimates of 1.2 – 1.6 billion barrels recoverable.

The principle prospective area for petroleum in Uganda is the Albertine Graben covering an area of 23,918 km2. Less than 40% of the exploration area in the Albertine Graben has so far undergone exploration – further discoveries are likely – with the possibility of peaking at over 10 billion barrels.

Exploration and Developments

Tullow Uganda Operations Pty Limited until 2012 was the main operator with discoveries in Uganda. In February 2012, the government of Uganda agreed to a USD 2.9 billion farm in between Tullow Oil, Total E & P and the Chinese National Offshore Oil Company Uganda (CNOOC Uganda) in 4 exploration areas with each having a 33.3% stake. Currently the Government has 4 active Production Sharing Agreements.

Crude Properties

The crude oil discovered is generally medium – light with API gravity mostly ranging between 30 – 34° and a pour point of 40°C. The crude oil is sweet with very low sulphur content in the order of 0.11%. This presents a challenge for transportation.

Refinery Development

A feasibility study conducted by Foster Wheeler (UK) Limited in 2010 concluded that a refinery in Uganda was feasible. This study defined the size, configuration, location, financing and markets for products for the refinery. The government of Uganda is in advanced stages of developing this project and has agreed to a refinery (30,000 – 60,000bpd) and a crude export pipeline.

Crude Pipeline

In June 2013, Uganda signed a memorandum of understanding with the Kenyan government for construction of a crude export pipeline to join with the proposed South Sudan export pipeline to Lamu port. A study to evaluate the development of pipelines and storage facilities for petroleum products is currently being carried out by Fitchner MEI Oil and Gas. A second study covering transportation and storage of petroleum products is being undertaken by Canadian Pacific Transom Limited (CPCS).

Key opportunities

  • A new licensing round: for competitive bidding is expected in 2014 for exploration blocks in the Albertine Graben. These blocks consist of new blocks and relinquished blocks which have been de-risked with significant amount of 2D and 3D seismic data and a proven working petroleum system.

  • Refinery Development: The construction of a 30,000/60,000bpd refinery in Uganda presents opportunities in its direct construction, operation and maintenance as well as associated infrastructure, which will include:

-Construction of processing facilities

-Construction of storage and pumping facilities

-Hydrocarbon and Water Pipeline constructions. Base cased design for hydrocarbon pipeline dimensions (96km, 16 inch) Northern line and (46km, 12.75 inch) Southern line.

-50 MW Gas / Heavy fuels to power generation facilities

-International airport, accommodation, medical and other facilities for over 5000 personnel.

  • Export Pipeline (crude and white products): Following the signing of the memorandum of understanding with the Kenyan government to develop a crude pipeline and a white products pipeline to the Indian Ocean coast, opportunities are expected in construction, maintenance and associated operational works.

  • Auxiliary infrastructure to develop the sector: railway line construction/upgrade, roads, inland ports, power generation facilities etc.

  • Education and Training: Building of institutions for blue collar training, petroleum skills developments etc

  • Engineering contractors: and other service provision like environmental assessments, waste management, EPC, consultancies.

  • Logistic services – estimated that for the development phase, over 1 million tonnes of material will have to be imported into Uganda. Passenger and cargo aircraft services will likely be required for personnel.

Latest export opportunities Oil & Gas

Latest export opportunities in Uganda

Getting into the market

The market is developed by 3 main Independent Oil Companies (OIC’s) in equal partnership over the current licence. Due to current and expected future local content requirements, it is advisable that companies set up a presence in-market. This involves registration of a Ugandan subsidiary / partnerships to enable them favourably compete for contracts / tenders.

Contacts

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

UKTI Events

UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

Latest events in the Oil & Gas sector

Major Events

East African Oil and Gas Summit 2013

29th -30th October 2013

Nairobi, Kenya

http://www.eaogs.com/

Useful links

More about OMIS and other UKTI services for exporters


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Article posted by UKTI Digital, for UK Trade & Investment
6 September 2013