The withdrawal of Dominion Uganda Ltd from exploration around Lake Edward—an area which, according to independent petroleum geologists, may hold between 90 million and 1.1 billion barrels of oil—leaves a plethora of unanswered questions swirling around an industry that, in Uganda, remains no more transparent than a dollop of waxy crude.
Why did Dominion pull out? What happened to a ‘Letter of Intent’ its parent company, UK-based Ophir Energy, signed in March 2012 with Canadian wildcatter, Octant Energy Corp., giving Octant an 80 percent share in, and operatorship of, Exploration Area 4B? Did the government of Uganda approve these deals? And where does this leave the mysterious Alpha Oil—a Ugandan owned company that, in one of the sector’s best kept secrets, for many years held a 5 percent stake in Exploration Area 4B? Read More
The Chairman of Tullow Oil’s Ugandan subsidiary has expressed disappointment at the slow progress towards oil production since the 2006 discoveries in the Albertine Graben.
“In Ghana, it took them two years to commence production of their oil after it had been discovered. Kenya, after discovering oil this year, has asked Tullow [Kenya] to deliver the oil as fast as it was done in Ghana. But in Uganda, we are still negotiating confidentiality issues, stabilisation clauses, etc,” said Elly Karuhanga. Read More
The view held by some Ugandans that oil companies are on a spending spree because they stand to legally recover their expenses when they eventually commence oil production is misled, says Eoin Mekie, the General Manager of Tullow Oil in Uganda.
While speaking to members of civil society at a meeting jointly hosted by Tullow, TOTAL and CNOOC, Mr. Mekie said that whereas the public believes that there is no incentive for the oil companies to be cost effective, it is in fact in the best interests of the oil companies to keep exploration costs low. Read More
A farmer who says that Heritage Oil dumped dozens of truckloads of waste in a pit dug on his land, a few kilometres north of Murchison Falls National Park, is still waiting for the National Environmental Management Authority (NEMA) to give him the results of tests they conducted in 2009, and for the waste to be removed for permanent disposal elsewhere.
Douglas Oluoch, 43, relates that he first came into contact with Heritage in his capacity as a local councillor (LC II) in Purongo sub-county of what is now Nwoya District. In 2008, he says, a Heritage official, who he can identify only as “Albert,” offered to pay him for accepting waste from exploration wells dug within the National Park.
Oluoch told Oil in Uganda that he received 750,000 shillings (USD 300) for accepting the waste, adding that “They said it was not harmful and would act as a fertiliser.” Read More
Uganda’s proposed National Oil Company will have the right to acquire a 15 percent stake in the oil fields that Tullow Oil, TOTAL and CNOOC are developing, according to Eoin Mekie, Tullow’s General Manager in Uganda, speaking exclusively to Oil in Uganda.
The arrangement was included in the agreements signed between Tullow and the government in early February, in defiance of a parliamentary moratorium on further oil contracts.
Mr. Mekie welcomes the creation of a National Oil Company, saying that “It will certainly cement our relationship with the government once we actually start working alongside them.” He adds that Tullow, CNOOC and TOTAL are ready to build the capacity of a National Oil Company that may also want to take up exploration options in other blocks when new licensing rounds begin.
However, Mr. Mekie also reveals that the government has “not yet shared its refinery plans” with the international oil companies, and that the companies and government need to reach “a concensus on what a basin-wide development will look like over the next five to ten years.” Read More
Just over a month after Tullow Oil’s Ngamia-1 exploration well in Kenya found significant deposits of oil, the company has announced that it has now drilled the same well deeper, encountering five times more oil than the initial find. Read More
“The revelation by senior officials of Tullow Oil Pty that the company negotiated a better deal with the Kenyan government may escalate tax competition between Uganda and Kenya as both governments race to offer better incentives to the oil company,” according to Peter Okubal, Programme Director of Panos East Africa, speaking at a workshop in Kampala last week. Read More
A promising oil discovery in north-western Kenya, announced yesterday by Tullow Oil Plc, may have consequences for Uganda’s oil production plans, according to a seasoned international energy expert consulted by Oil in Uganda.
“The more oil they find in this region the more difficult it will be to defend building a refinery in every country,” said the source.
Uganda’s 2008 oil and gas policy pledged the construction of an oil refinery to maximise the value-addition benefits of national oil production. Two weeks ago the government announced the demarcation of a 29 km2 site for the refinery and related installations in Buseruka sub-county of Hoima district. Read More
Neptune Petroleum (Uganda) Ltd., a wholly owned subsidiary of UK-based exploration company, Tower Resources, has struck unlucky for a third time in the West Nile region where a 590 metre well drilled in February failed to find any oil.
The Mvule-1 well was drilled in Exploration Area 5, a 2,491 km2 strip following the course of the Nile as it flows north to the border with South Sudan. Neptune has been surveying and prospecting the area since 2005. Two earlier exploration wells— Iti-1 and Avivi-1—were drilled in 2009 and 2010 respectively, but neither struck oil. Read More