Huge deposits of oil have been identified in Uganda along the shore of Lake Albert:
Uganda’s oil reserves rival Saudi Arabia’s, says US expert
KAMPALA, UGANDA – Uganda’s oil reserves could be as much as that of the Gulf countries, a senior official at the US Department of Energy has said.
Based on the test flow results encountered at the wells so far drilled and other oil numbers, Ms. Sally Kornfeld, a senior analyst in the office of fossil energy went ahead to talk about Uganda’s oil reservoirs in the same sentence as Saudi Arabia.”You are blessed with amazing reservoirs. Your reservoirs are incredible. I am amazed by what I have seen, you might rival Saudi Arabia,” Kornfeld told a visiting delegation from Uganda in Washington DC.
The group of Ugandans was in Washington on an international visitor programme and looked at the efficient use of natural energy resources.
The group comprised Ministry of Energy officials, a Member of Parliament, members from the civil society and one journalist.
At present, Uganda has four oil prospectors on the ground including Heritage Oil, Tullow Oil, Tower Oil and Dominion Oil.
Of the four prospectors, Tullow and Heritage have registered success at wells in two blocks in the Albertine basin, which lies in the upper-most part of the western arm of the Great Rift Valley.
According to data so far aggregated since the first discovery was made by Australian prospector Hardman Resources (now taken over by Tullow) in June 2006, Uganda has established reserves at 3.5 million barrels of oil per day.
Experts in oil exploration say this could be just a tip of the iceberg.
In April last year, Tullow embarked on what it termed as a major drilling campaign in the Butiaba area around Lake Albert targeting an overall reserve potential in excess of a billion barrels.
The Butiaba campaign was preceded by successes in two drilling campaigns in the Kaiso-Tonya area and the Kingfisher field and all these have been 100% successes so far.
The Butiaba campaign has thrown up successes but the two biggest so far have been the Buffalo-Giraffe wells – described as “one of the largest recent onshore oil discoveries in Africa“.
“Combined with our other finds in the region, we have now clearly exceeded the thresholds for basin development,” the chief executive of Tullow commented then.
The Giraffe-1 exploration well, which is located in the Butiaba region, came up with over 38 metres of net oil pay within an 89-metre gross oil bearing interval.
The data from the Giraffe discovery indicate a net reservoir thickness of 38 metres, the largest encountered in the area to date.
The Buffalo-1 exploration well in Block 1 encountered 15 metres of net gas pay and over 28 metres of net oil pay.
The gas and oil columns encountered are 48 metres and 75 metres respectively with the potential to be even larger.
As Kornfeld marveled at Uganda’s oil finds, she was quick to add that for the country to benefit from the oil and gas resources but also avoid the pitfalls of oil producing countries like Nigeria, it is extremely important to set up strong governance structures.
Kornfeld and the other United States officials said they are ready to help Uganda’s nascent oil and gas sector with anything including the key environmental issues that are crucial to the efficient management of oil and gas.
“Anything you might want us to help you with we will and we have a lot of expertise in environmental issues relating to oil and gas,” Kornfeld said.
And in a quote from the article written a year ago, with the oil blocks pictured above:
“The Albert Basin now looks increasingly like it has the elements to make it a world-class petroleum basin. The flow rates, even constrained by available completion and test facilities, far exceeded our expectations,” Tony Buckingham says.
It is certainly true the the US has a lot of experience, and one might say expertise, in environmental issues relating to oil and gas. Unfortunately much of that expertise and experience is involved in circumventing and evading environmental law and responsible environmental management.
Then, as Ms. Kornfeld said, there is the issue of avoiding the pitfalls of other oil producing countries like Nigeria. In general, the US has supported the policies and governments in Nigeria that have engineered these pitfalls, into seemingly bottomless pits, working along with the US based oil corporations operating in Nigeria. So although they might know what to avoid in order to be socially and environmentally responsible, there is no indication that the US government or the oil corporations have any intention of acting in socially or environmentally responsible ways. Uganda does not have much history of environmentalism it can point to with pride either. So far the US response to African oil issues has been almost entirely military, hence AFRICOM, the US Africa Command.
The Uganda government may be strong in the sense of using muscle to insure compliance. It employs muscle internally against dissent, and externally to assist in exploiting the resources of its neighbors, particularly in the DRC. However its democratic history is weak, and employment of any form of participatory democracy in decision making is sadly lacking. The US has been an enthusiastic supporter of Uganda’s “strength”. Mahmood Mamdani points out that Museveni has been a US proxy in Rwanda, and is still a US proxy in the DRC. AMISOM soldiers from Uganda are in Somalia acting as US proxies, and the underlying issue there too is oil.
Museveni‘s name means son of a man of the seventh, meaning from the Seventh Battalion of the Kings Africa Rifles. That seems ironically appropriate, as Uganda is acting as a US proxy in the DRC, Somalia, and Ugandan mercenaries have played a prominent role in Iraq. US proxy warriors in Africa have been referred to as Bush’s Africa Rifles, now Obama’s Africa Rifles, not too different from the colonial proxy war tradition of the King’s Africa Rifles.
Museveni has shown no interest in allowing any democratic opposition to his presidency. In May he declared: I see no successor in NRM.
He may have ruled Uganda for the past twenty three years but President Yoweri Museveni is still hesitant to hand over power, not even to members of the National Resistance Movement, of which he is the leader.
On Thursday the president told NRM Members of Parliament that while he would be “happy” to hand over power, he saw “nobody” ready to take on the daunting responsibility of leading Uganda.
So the Uganda government will continue to run along lines that Museveni sees as in his/Uganda’s interest. I don’t know if this is the “strong governance structures” to which Kornfeld refers. It may well be. She and her cronies may see this as the most convenient way for the US to access Ugandan oil. But it cannot be described as democratic, or in any way resembling participatory democracy. Unless people who live where the resources are can benefit from those resources, and have some say in how they are disposed, there will be conflict. And problems are already brewing. In April 2009 Uganda Bunyoro Kingdom Threatens Lawsuit over Oil Exploration:
Cultural leaders of Uganda’s Bunyoro kingdom, located on the Ugandan side of the oil-rich Albertine rift, have threatened legal action against the central government over oil exploration and production activities there, a kingdom official said Monday, but the government has promised talks to resolve the issue.
Yolamu Nsamba, the principal private secretary of the king of Bunyoro, said the government has breached the pre-independence agreement of 1955, which provides that Bunyoro is entitled to substantial amounts of revenue from mineral exploration in its kingdom.
“For years now, the central government has been dealing with oil exploration companies secretly yet the law has never been changed,” he said, adding that kingdom officials have already informed the central government of its intentions.
A government official told Dow Jones Newswires separately Monday that the central government would soon start talks with kingdom officials to resolve the issue. Uganda is expected to embark on an early oil production scheme in the first quarter of 2010.
The 1955 agreement was signed between the Bunyoro Kitara Kingdom and the U.K. protectorate government and stipulates that in the event of mineral development taking place in Bunyoro, a substantial part of the mineral royalties and revenue from mining leases would be paid to the native government of Bunyoro Kitara.
Bunyoro remains influential in Uganda although its cultural leaders are prohibited from engaging in national politics.
It will be interesting to see how Bunyoro fares in maintaining some control over its riches. And there are troubles with the neighbors too. In May 2009 Uganda beefs up marine surveillance on its waters.
Uganda has stepped up security on its waterways and is quietly revamping its marine police in anticipation of tensions with its neighbours over the country’s natural resources.
Apparently, the discovery of high-value natural resources such as oil and gas under and near Uganda’s lakes and the need to protect fisheries resources are the imperative behind moves to improve security on the country’s waters.
The Police Marine Unit has acquired four specialised boats at a cost of $8.6 million to be paid over a period of five years.
The acquisitions and keen interest in marine security come in the wake of an incident in August 2007, when Congolese troops on the disputed Rukwanzi island in Lake Albert shot and killed oil prospectors who were carrying out surveys on the Ugandan side of the lake.
Officials say terror threats have also underscored the need for improving security on the country’s lakes because Uganda’s main Entebbe airport — the kind of key infrastructure usually targeted by terrorists — is located on a peninsula in Lake Victoria.
Much as the boats are up and running and have recently been seen around Migingo island, over which Kenya and Uganda are squabbling, questions are being raised over the capacity of the police to take on and maintain such infrastructure both financially and technically.
Uganda is landlocked, so issues of how and where the oil will be refined and transported are still up in the air. Tullow, Heritage Face Tough Choices on Uganda Oil Devt.
After remarkable exploration success in Uganda, Tullow Oil PLC (TLW.LN) and Heritage Oil Ltd. (HOIL.LN) face tough choices over how to develop the oil they’ve discovered.
Both companies face immense infrastructure challenges bringing the oil from its remote region to world markets. They have to walk a fine line between their commercial goals and the sometimes conflicting ambitions of the Ugandan government. Tullow and Heritage also have to handle overtures from much larger rivals that want in on the substantial quantities of oil they have discovered.
“Lake Albert is a multibillion-barrel basin,” with great potential to expand reserves even further once problems with licenses on the Congolese side of the lake are resolved and exploration begins there, said Paul Atherton, chief financial officer of Heritage.
Tullow and Heritage have long talked of exporting the Lake Albert oil to world markets via Kenya, initially by rail to the port of Mombassa and eventually through a large enough pipeline to carry the 150,000 barrels of oil per day the basin is thought to be capable of producing.
The government has clashed recently with Tullow over the pipeline, said an official at the energy and minerals ministry.
And Uganda’s energy minister recently said no unrefined oil should be exported from Uganda and instead the country should build a refinery to process all domestic crude and supply oil products to the whole region.
As talks on the development move slowly forward, one voice that has been heard little so far is that of the local communities, said Dickens Kamugisha, chief executive of the African Institute for Energy Governance, a non-governmental organization based in the Ugandan capital.
Local people are worried about the problems caused in Nigeria, Angola and Chad by the exploitation of oil resources and unchecked flows of petrodollars to governments with a reputation for corruption, he said. “The process has been secretive,” with insufficient public discussion over the competing development plans and no publication of the production-sharing contracts between the Ugandan government and the companies, he said.
Tullow and Heritage stressed that they have maintained good relationships with local communities. Tullow said it has shown local people around their drill sites to explain what they are doing and both companies are contributing to local development by funding schools, health clinics and even lifeboat training on the lake. Employment of local people “would be an integral part of any development plan,” along the lines of work the company has done in Ghana, said McDade.
Kamugisha acknowledged the local work of the companies, but expressed concern about the lack of transparency from the government. He said he wants the Ugandan government to follow the principles of the Extractive Industries Transparency Initiative and declare all oil revenues openly in order to prevent corruption. Both Tullow and Heritage said they are happy to disclose the terms of their contracts — which they described as containing good terms for Uganda — if the government allows it.
Whether this is enough is unclear. A dispute is already brewing over who controls rights to minerals in the Lake Albert area and how revenues will be distributed between the government and leaders of the Bunyoro Kingdom — the ethnic grouping that occupies districts on the lake’s eastern shore . Local communities “say they have been completely left out of the process and are not satisfied,” said Kamugisha.
It looks like some rough roads ahead.
October 15 2011:
For more on this topic see:
If Uganda Has Oil It Must Need The Pentagon’s Democracy including the documents in the comments.
For more on the first attempt of the Pentagon to go after Kony and the LRA see:
Stability operations cause 900 civilian deaths, 100,000 displaced, miss target