Kampala — UGANDA has continued to deliver major oil and gas exploration success with further 'world-class" discoveries attracting about $506m in foreign direct investments, Dozith Abeinomugisha, the senior geologist in the energy ministry, has said.

"We project that by the end of the year these investments will be in excess of $900m," he said. "To date, 34 oil wells have been drilled and 32 encountering oil/or gas and over two billion barrels of oil is in place." The two oil wells that did not encounter oil or gas are Awaka-1 in Buliisa and Iti-1 in Arua.

"Remember the area tested presently represents less than 30% of the total area with the potential for petroleum production in the country," he boasted.

Where is the oil found

The oil-rich Albertine region, that is about 23,000 sq km, stretches from the West Nile part of Uganda to South-Western tip in the district of Kanungu.

The region has been divided into nine exploration areas and most of the oil prospective areas lie in the game reserves.

"A proactive approach is required so that the country can benefit from both tourism and oil resource," he observed.

Five exploration areas have been licensed to prospecting companies.

The four oil prospecting companies include Tullow Oil (Uganda) operations, Heritage Oil and Gas, Dominion Petroleum and Neptune Resources.

The remaining four exploration areas are yet to be licensed. "No licensing is currently being undertaken in the country due to the ongoing formulation of a new regulatory framework for the sector," Abeinomugisha explained.

"There is, however, significant interest being expressed by international oil and gas companies in the unlicensed areas for petroleum and production.

Licensing is expected to continue after a new regulatory framework is put in place."

The resource base, according to the energy ministry and the oil companies, could sustain short and long-term oil production, which could propel Uganda to the top 50-oil producers in the world.

"The discoveries can support production of over 100,000 barrels (159 litres) of oil per day for 20 years and are sufficient to implement large-scale refining in the country," Abeinomugisha said.

The CEO of Tullow Oil recently said 800 million barrels of oil have been discovered in Uganda, worth about $50b (sh100 trillion).

Tested oil wells flow rate

Ten oil wells were tested and their flow rates and oil quality were confirmed.

These include Waraga-1 whose flow rate was at 12, 050 barrels of oil per day (bopd), Kingfisher-1 flow rate was 13,893 bopd, Nzizi-2 had gas flow rate of 14 million cubic metres of gas per day.

Other oil wells tested include Kigogole-1 whose flow rate was 300 million bopd, Mputa-1 flow rate was 1,035, Mputa-3 flow rate was 4,000 and Mputa-4 flow rate was at 2,100 bopd.

Kasamene oil well flow rate was at 3,550 bopd and Mputa-5 flow rat was at 1,000 bopd.

"All these oil wells have sweet (low sulphur) oil," Abeinomugisha said.

In 2009 alone, there have been 90% exploration success rate building major resources potential for further appraisal, Tullow Oil said.

Bugoma (Hoima)

In Block 3A, the Kingfisher appraisal programme concluded in February 2009 resulting in gross oil resources of about 200 million barrels.

Ngassa-2 encounters oil huge oil reserves under Lake Albert and engineers are still evaluating the exact oil quantity which is believed to contain huge oil deposits.

Oil production, according to Tullow Oil, from this field could be initiated within the next two to three years.

Butiaba (Hoima)

The Butiaba campaign in Blocks 1 & 2 continued over the period resulting in six further successful wells: Giraffe-1, Karuka-2, Nsoga-1, Kigogole-3, Wahrindi-1 and Ngara-1.

The first phase of the exploration drilling campaign has been completed in the Butiaba area of Block 2.

Further exploration and appraisal drilling in Block 2 is expected to commence early in 2010.

Amuru (Buffalo-Giraffe) discovery

Heritage Oil operates in Block 1 which lies north of Lake Albert covers parts of Buliisa, Amuru & Nebbi districts.

Two oil wells have been drilled on the large Buffalo-Giraffe discovery that is located north of the Victoria Nile.

The field that is located in the Murchison Falls National Park confirmed a 300 million barrel gross discovery.

In Buliisa, Heritage drilled the Warthog oil discovery well in 2008.

Future plans

Heritage Oil has announced plans to drill 10 more oil wells in Murchison Falls National Park in northern Uganda late this year/early next year.

According to Abdul Byakagaba, after the oil wells have been drilled and oil is found, "we will undertake appraisal drilling to delineate the actual extent of the oil bearing reservoirs."

Tullow Oil plans phased development of the Lake Albert basin prioritising oil for local and regional energy and fuel requirements and export in the later phases of development. Early production from the Kasamene field is expected to be achieved through extended well tests in 2010.

In the next phase, production from field developments in Block 2 (Kasamene) and Block 3 (Kingfisher) is expected to be delivered initially by truck and then by pipeline to a central gathering and distribution hub, for onward transportation to regional markets.

Initial production capacity of these field developments is expected to be between 10,000 and 20,000 boepd with the facilities capable of modular expansion, as further phases of the basin development are brought on stream.

Neptune petroleum that operates in Arua and Nebbi prospects has announced plans to drill a second oil exploration well in the West Nile region.

The drilling has been fixed for early next year, according to the firm's statement. The announcement comes at a time when a re-evaluation of data from Iti-1, which was dumped mid-this year, for lack the hydrocarbons.

Dominion Resources, which operates in the districts of Kanungu and Rukungiri, will drill its first well by the end of this year.