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Government to dispose-off crude oil

Dr Josephine WapakabuloThe Ugandan government plans to dispose-off crude oil stock that was accumulated during the oil exploration and appraisal phase.

Over 45,211 barrels of oil were reportedly accumulated during the extended well testing in the Albertine graben in Mid-Western Uganda.

Extended well tests (EWTs) are used to undertake further evaluation of the productivity and characteristics of reservoirs.

The tests help oil engineers and technicians in understanding the potential of reservoirs to enable better planning and definition of appropriate field development philosophies and production technologies. The exercise thus helps development engineers and production technicians to pilot future facility designs during actual oil field development and eventual production. Extended well testing also helps to obtain additional production-related data, such as water cut, sand production, and well deliverability.

The oil that was collected during the extended well testing is currently stored in bitutainers at oil well sites of Kasemene 1, Ngara 1 and Ngiri 2, all in Buliisa district. More oil is stored at Tangi Camp area in Nwoya district, Acholi sub-region.

Some locals in the oil-rich Bunyoro region have been suspicious about oil tankers that have been moving in and out of the Albertine graben. There has been speculation that the tankers could be siphoning oil out of the oil fields. Government and oil firms have repeatedly denied the accusations.

“Those speculations have been common and Government needs to come out clearly and transparently to explain what those tankers transport,” said Biira Nasser Kiwanuka, the Executive Director of Midwestern region Anti- corruption Coalition (MIRAC), a Bunyoro regional anti- corruption agency.

Oil in Uganda has learnt that Uganda National Oil Company (UNOC) Ltd is sourcing for companies that can purchase the 45,211 barrels of test crude in the Albertine graben.

UNOC’s overall function is to handle the State’s commercial interests in the oil and gas sub-sector and ensure that the resource is exploited in a sustainable manner in order enable realization of benefits for the current and future generations.

UNOC, as per the Petroleum (Exploration, Development and Production) Act and the Petroleum (Refining, Conversion, Transmission and Midstream) Act, both of 2013, is mandated to operate across the petroleum value chain (upstream, midstream and downstream).

Purchase for test oil up for grabs

The application process for interested firms in the purchase of the test crude oil is on-going and the deadline is July 10th this year, Oil in Uganda has learnt.

The applications are being submitted to the office of the UNOC Head of Procurement and logistics which is located at Amber house in Kampala.

The companies are required to present a crude oil stabilization plan including technology that will be used.

According to a procurement notice reference number UNOC/Disposal/17-18/001, the companies interested in purchasing the crude should make formal applications to UNOC.

-“Buyers must demonstrate the provision of suitably insulated and certified containers for transportation of heated test crude oil”, the notice reads in part.

-The buyers are required to provide the oil spill response plans and all vehicles being fitted with -kits and attachment of contractor personnel who will be trained on how to use them.

The buyers must have off-loading and feed pumps plus heaters.

-The buyer must demonstrate Quality, Health, Safety, and Environment (QHSE) management system, procedure/plans for journey management, incident management and spill response, the notice further reads.

The UNOC Communication Officer, Ms. Angella Kariisa said test crude was initially meant to be burnt through flaring during the well-testing activities.

“Government decided that is was not good for the environment so the practice of flaring was stopped. We therefore thought it would be in the country’s best interest to sell it and make some money off it”, she said.

Asked how much money UNOC anticipates to earn from the test crude, Kariisa was non-committal.

“We are working to get the best price possible”, she said.

The Buliisa County Member of Parliament, Hon. Stephen Birahwa Mukitale welcomed the disposal of the crude oil.

“It allays fears and suspicions from people who have been alleging that the oil was already being sold off,” said Hon. Mukitale, whose home is in Kisansya cell, Buliisa Town Council, where Kasemene oil field is located.

Asked about the feeling of the locals about the sale of the crude, Mukitale said the people he represents do not have any issues with it.

“It is procedurally right for government to dispose-off public assets that they are not using. That crude was used for study purposes. The purpose has been achieved”, he said.

He however suggested that such crude could have been used by Ugandan industries as heavy fuel for running heavy duty power generators. He added that the major focus of his constituents who host more than 28 oil wells is the next phase of development and production. They are interested in being aligned with the developments so as to gain more benefits overall.

By Oil in Uganda Correspondent

Oil.Uganda@actionaid.org