Movenpick Ambassador Hotel & Resort, Accra, Ghana · PDF file2.1 Uganda’s Petroleum Exploration and Production is ... NATIONAL OIL AND GAS POLICY ... Uganda’s oil and gas sector

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MINISTRY OF ENERGY AND MINERAL DEVELOPMENT

Presented By:

Bernard Ongodia| Senior GeophysicistPetroleum Exploration and Production Department

at

PwC AFRICA OIL AND GAS LEADERSHIP CONFERENCE

Movenpick Ambassador Hotel & Resort, Accra, GhanaThursday 17 October, 2013

Petroleum Exploration and Production Department

PRESENTATION OUTLINE

1. INTRODUCTION

2. REGULATORY FRAMEWORK

3. NATIONAL OIL AND GAS POLICY

4. STRATEGIES TO ENSURE NATIONAL PARTICIPATION

5. ACHIEVEMENTS- NATIONAL PARTICIPATION

6. WAY FORWARD

7. CONCLUSION

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Petroleum Exploration and Production Department 3

1.1 KEY STATISTICS AND FACTS

Uganda is part of EAC region with 4 other states Kenya, Tanzania, Burundi, Rwanda

EAC region; Surface area: 1.82 million km2

Population: 133.1 million GDP (market prices): $84.7 Billion Common market, Customs Union, planning monetary union and political

federation

Neighboring countries among others; South Sudan DRC Ethiopia Mozambique

Uganda key statistics; Area : 241,550.7 km2

Population: 33 million (2011) GDP: $16.8 Billion (2011) GDP growth: 6.7% (2011)

1. INTRODUCTION

Somalia Malawi Zambia


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Albertine Graben1

Hoima BasinLake Kyoga BasinKadam-Moroto Basin

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Lake Wamala BasinLake Victoria Basin

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LakeEdward

LakeGeorge

LAKEVICTORIA

LakeWamala

HOIMABASIN

LAKEVICTORIABASIN

LAKEWAMALABASIN

LAKEKYOGABASIN

KADAM-MOROTOBASIN

LAKEKYOGA

Sedimentary Basin in Uganda (Source: PEPD)

The Albertine Graben is themost prospective

2.1 PETROLEUM POTENTIAL

1. INTRODUCTION (2)


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21 fields discovered: one discovery (Lyec) made inDecember 2012.

3 (three) fields considered sub commercial andreturned to Government.

18 fields taken forward for appraisal.

Applications for production licenses for 9 fieldshave been submitted.

1 (one) production licence has been granted.

109 wells drilled in Albertine Graben and 97 wellshave encountered HCs.

Total Oil in place; 3.5 billion barrels.

Recoverable; over 1.2 billion barrels.

40% of Albertine Graben explored and there isadditional potential in the unexplored parts of theGraben.

Discoveries in the Albertine Graben (Source: PEPD)

PROGRESS OF EXPLORATION

1. INTRODUCTION (3)


TOTAL E&P Uganda B.V

Appraisal of one discovery in EA1A Appraisal of six discoveries in EA1 Includes appraisal drilling, well testing

and 3D Seismic survey

Tullow Uganda Operations Pty Ltd

Submitted application for ProductionLicense over six discoveries in Buliisa

Submitted application for ProductionLicense over two of the discoveries inKaiso-Tonya while one is under appraisal

Still appraising the Waraga discovery

CNOOC Uganda Ltd Production license for Kingfisher issued;

Field Development of the field estimatedto take 4years

STATUS OF LICENSING

1. INTRODUCTION (4)


2.1 Uganda’s Petroleum Exploration and Production is Governed by:

1. The Constitution of the Republic of Uganda, 1995

2. The Petroleum (Exploration, Development and Production) Act, 2013.

3. The Petroleum (Refining, Gas Processing and Conversion, Transportation and Storage)

Act, 2013.

4. The Petroleum (Exploration and Production)(Conduct of Exploration Operations)

Regulations, 1993.

• Development of Upstream and Midstream Regulations ongoing

5. Model Production Sharing Agreements (PSAs)

6. Environment, Wildlife, Water , Income Tax, Land, Statutes and Guidelines7

2. REGULATORY FRAMEWORK


The new law provides for the following;

The Government may participate in petroleum activities through a specified participating

interest in a PSA

Licensee, its contractors and subcontractors shall give preference to Ugandan citizens and

companies when procuring goods and services

Obligation to notify Ugandan citizens and companies about upcoming contracts and the HSE

standards required by the licensee

Licensee is obliged to train Ugandans in all phases of the petroleum activities

Government to prescribe requirements for technology transfer and skills training – and to

share the responsibility with the licensee

A report of local goods and services utilized during the year, and a detailed program for

training and employing Ugandans to be submitted to government

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2. REGULATORY FRAMEWORK (2)


3. NATIONAL OIL AND GAS POLICY

Policy Goal:

“To use the country’s oil and gas resources to contribute to early achievementof poverty eradication and create lasting value to society.”

Policy has ten objectives, each with strategies and actions to meet theobjective.

Policy available in print and website: www.petroleum.go.ug

An abridged and translated version of the policy is being finalized.

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Objective 7 provides for optimum National Participation in the oil and gas sector

Concluded a study on the opportunities and challenges for Ugandans’ participation in the oil

and gas sector in September 2011.

Copy of the study is on www.petroleum.go.ug

Recommendations of the study are under implementation

Government is developing a National Content Policy and Plan.

Oil companies are being obliged to employ Ugandans and give business opportunities to

Ugandan companies.

Various Ugandan companies are providing services to the industry; Environment

Consultancy, Civil Works and Construction, Transportation and Heavy lifting.

Several aspects of local content have been included in the new petroleum legislation.10

3. NATIONAL OIL AND GAS POLICY (2)


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Skills requirement study for the oil and gas in

the country is underway.

IOCS have undertaken industrial

baseline survey

Commencement of Uganda Petroleum

Institute Kigumba artisans and technicians.

Undergraduate and post graduate studies in

Petroleum Geoscience at Makerere

University

Private institutions are introducing petroleum

related courses

Increased training of Ugandans in oil and gas

professions abroad for both public and

private players

Objective 8 of the Policy provides for the Development and Maintenance of National Skills

and Expertise

3. NATIONAL OIL AND GAS POLICY (3)


4. STRATEGIES TO ENSURE NATIONAL PARTICIPATION

1. Regulation of inflow of expatriates; expatriate workers must acquire work permits.

2. Requirement to develop Nationalisation Plans for expatriate positions.

3. Approval of organisation structures for oil companies.

4. Streamlining the procurement procedures for oil companies.

5. Production Sharing Agreements (PSAs) provide for State Participation in the range

of 15% to 20%.

6. Capacity building and skills development.

7. Several aspects of national participation have been included in the new petroleum

legislation. 12


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5.1 NATIONAL ENTREPRENEURS

National Entrepreneurs are actively involved in provision ofservices in the sector in the following areas;

1. Civil Works and Engineering

2. Medical Services

3. Clearing and Forwarding

4. Environment Services (Consultancy and Waste Handling)

5. Security

6. Catering and Camp Management

7. Freight Forwarders/Courier services

8. Rig Services( Movement and Mud logging)

9. Office Facilities and Equipment

10. Equipment lifting services

11. Engineering services

5. ACHIEVEMENTS - NATIONAL PARTICIPATION


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5.2 EMPLOYMENT BY OIL COMPANIES • Licensed companies in the countryare employing an increasing numberof Ugandans

• Tullow employees a total of 203people out of which 80% areUgandans

• CNOOC plans to employee 115people out of which 70% areUgandans

• Total plans to employ a total of 178people out of which 60% areexpected to be Ugandans

• These numbers are expected toincrease as more Ugandans acquireskills in the oil and gas sector.

Hundreds of semi-skilled and unskilled workers areemployed from the local communities during operations

5. ACHIEVEMENTS - NATIONAL PARTICIPATION (2)


5.1 INTERNATIONAL OIL SERVICES COMPANIES

Some of the world’s largest oil service companies are now resident and haveopened bases and yards in the country; these include

• Schlumberger• Halliburton• Baker Hughes• Weatherford

These service companies are also providing training and employmentopportunities to Ugandans

Over 110 Ugandans are currently employed by Oil Service Companies astrainees.

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5. ACHIEVEMENTS - NATIONAL PARTICIPATION (3)


6. WAY FORWARD

The Ministry is developing a National Content Policy and Plan to further guide the Sector with regards toNational Content Development in the Country.

The Plan will mainly focus on;

6.1 Institutional development

Establish a government body for national content enhancement

Regulate procedures for procurement

Define and operationalize how national content shall be measured

Enforce oil companies to commit to local content development

Develop a national content policy and ensure that its an integrated part of the nationaldevelopment plan

Devise mechanisms to deal with the corruption perception

6.2 Enterprise development

Develop an adequate capacity building program for the industry

Encourage the teaming between Ugandan and foreign firms

Establishment of an SME program for the petroleum sector

Identification of Industry projects with a large market potential


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6.3 Capacity building

Strengthen the Capacity for vocational training

Facilitate the establishment of Education Training centers

Promote the establishment of institutions of excellence for higher level of education

6.4 Facilitating national participation

Ensure that Contracts for works, goods and services in the Oil and Gas Sector are structured to alignwith local capacity

Establishment of a central information office for national content

Establishment of a national register for prequalified companies

Regulate the inflow of expatriates

6.5 Monitoring and Evaluation

Develop and apply a holistic approach to measure and monitor national content

Establish a system for evaluation of national content performance

A draft National Content Policy has been developed and is being discussed by different stakeholders.

Government is to undertake a skills requirement study for the oil and gas sector.

6. WAY FORWARD (2)


CONCLUSION

Uganda’s oil and gas sector is evidently growing in terms of resources, the regulatory and

institutional framework to manage the resources and the infrastructure to support their

development.

The Government is committed to national content development in the oil and gas sector.

Capacity building

Establishment of education training centers

Information sharing

Policy and Plan for National Content will give direction on subsequent legislation, regulatory and

other action by branches of Government, other institutions as well as the private sector.

Formulation of sustainable partnerships and collaboration with international companies is critical.

Knowledge, skills transfer and technological development

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Thank You

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Further Information;COMMISSIONERPETROLEUM EXPLORATION ANDPRODUCTION [email protected]

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Movenpick Ambassador Hotel & Resort, Accra, Ghana · PDF file2.1 Uganda’s Petroleum Exploration and Production is ... NATIONAL OIL AND GAS POLICY ... Uganda’s oil and gas sector