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
As midwestern Uganda gears up for oil production that will entail billions of dollars in investments, a range of central government officials interviewed by Oil in Uganda admit that there is no overall development plan for the region, and no mechanism for coordinating the efforts of different departments. 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
by Taimour Lay
When you stand on the island of Rukwanzi at the heart of Lake Albert, your first thought, echoing perhaps the casual rhetoric of the region’s oil men, is that you are at the edge of a new frontier.
But for its communities the lake is a centre, a point of connection and integration, the great body of water into which the White Nile flows, part of the vast rift valley that draws Africa’s citizens into mutual dependency. What happens here matters to half a dozen neighbouring countries. But the lines being drawn now, as neat and straight as the borders on colonial maps, mark not sovereign territory, but exploration blocks for oil and gas companies. Read More
The Minister for Information in the Bunyoro-Kitara Kingdom has urged government to give special consideration to people in the oil producing areas as compensation for losses they may incur once oil production begins.
“Our people are going to face the effects of environmental degradation, social and political problems. They deserve additional benefits over and above other Ugandans,” said Moses Kirungi. “How can you hunt an animal on my land, slaughter it and take away all the meat without leaving some of the kill for the owner?” Read More
The government of Rwanda is negotiating an oil Production Sharing Agreement with a small Canadian company, Vanoil Energy, according to Dr. Michael Biryabarema, Director General for Mines and Geology in the Ministry of Natural Resources, speaking to The New Times newspaper.
Vanoil has been surveying the Lake Kivu Graben since 2007, following oil discoveries in Uganda’s geologically related Albertine Graben. The company is now analysing the results of 2D seismic data gathered during short-term Technical Evaluation Agreements with Rwanda.
Dr. Biryaberema says the government has now sent Vanoil a draft Production Sharing Agreement for review. It is expected to award the company exclusive exploration rights over a 1,631 square kilometre area for a period of five years. 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
Ministry of Energy and Mineral Development sources confirm that they have commissioned a private company to design a compensation and resettlement package for residents of Kabaale parish, in Hoima District’s Buseruka sub-county, who will be displaced by the 29 square kilometre refinery complex to be built there.
It’s not going to be an easy job for the consultants.
Since the discovery of oil, the trickle of informal settlers has been swollen by a veritable tide of hopefuls. Many of them have taken up fishing on Lake Albert.
Now, as news of the refinery spreads, longer term residents tell Oil in Uganda that more people are arriving every day, hoping to catch some crumbs from the compensation cake.
Land tenure in the area is largely informal, relying on deals with local leaders and between private individuals, so it will be no simple matter to work out who ‘owns’ what.
The five pen-portraits that follow illustrate the human complexity of an area that will soon be covered in concrete. Read More