Partnerships and Local Content Collaboration Are Key To Harnessing Oil and Gas Potential In Uganda.

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 Uganda is one of the hot spots for oil development in sub-Saharan Africa

In May 2019, Uganda announced a second licensing round to cover five blocks in the highly prospective Albertine Graben. The second licensing round has been made at an important time for Uganda and the region as the country has moved steadily towards first oil and much of the all-important infrastructure is well underway including the East African crude oil pipeline(EACOP) pipeline and the refinery.

 Read also:     Orca Exploration Seeks To Maximize The Value Of Tanzania Operations

Uganda is an attractive investment opportunity combining high-success rates of oil discovery, with a liberalized economy open to international investment. However, partnerships and local content collaboration are paramount to drive Uganda’s growth in oil and gas opportunities.

 

Somalia ready to attract global participation with offshore licensing round

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Following the signing of a new Petroleum Law and Revenue Sharing Agreement in May of this year, as well as the unveiling of its first ever offshore licensing round (15 blocks covering 75,000 sq. km), the Horn of Africa nation is keen to show the world that it is open for business.

The law breathes new life into a dormant Somali oil and gas sector – several concessions were awarded to the majors in the late 1980s, but Civil War erupting in the country led to a force majeure declaration. Since the government collapse in 1993, insecurity and lack of infrastructure have largely rendered the region a no-go for western companies, leaving local warlords and militias to claw out territories.

Read also: Orca Exploration Seeks To Maximize The Value Of Tanzania Operations

Almost 30 years later, Somalia is ready to shake-off past woes and attract global participation. This effort is being spearheaded by Minister of Petroleum and Mineral Resources, Abdirashid Mohamed Ahmed, who recently commented, “this year is a landmark in the development of Somalia’s natural resources…the Ministry has worked successfully with the federal member states to create an equitable and transparent framework to develop natural resources for the greater good of Somalia”.

As part of its efforts, Somalia is expected to honour most legacy contracts. An agreement has already been reached with Shell and ExxonMobil to settle rental fee payments for offshore blocks (part of a dormant joint venture). However, it does not seem that either company is rushing back into the country, with Shell stating that “the payment does not affect force majeure status, which remains in place”.

Despite this, Mr Ahmed has reason to hope that investment will begin to flow into Somalia. Seismic surveys conducted by British companies Soma Oil & Gas and Spectrum Geo suggest the country has promising offshore oil reserves of up to 100 billion barrels. What’s more, recent oil finds in Uganda and huge gas discoveries offshore Tanzania and Mozambique mean that oil companies have flocked to East Africa in recent years – Somalia could well become a beneficiary of this trend.

Mr Ahmed is attending Africa Oil Week 2019 in Cape Town this November. He will use this opportunity to lay out the future vision and objectives of the Somali national oil and gas sector in front of financiers and operators. The summit’s Director of Government Relations, Paul Sinclair, commented, “we are working closely with the Minister to ensure that the global private sector benefits from exclusive opportunities going live in a Somali National Showcase at Africa Oil Week”.-APO Group.

(With Inputs from APO)

Orca Exploration Seeks To Maximize The Value Of Tanzania Operations

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Orca exploration who operates the songo songo gas field in Tanzania under its subsidiary Pan African energy Tanzania Limited announced the appointment of  RBC capital markets to review strategic alternatives for the Company under the direction of a special committee of independent directors, says a press release issued on 5th September 2019.

The review will include the evaluation of alternatives for the return of capital to shareholders and business combination opportunities.

Also Read:   Five Key Recent Developments Impacting The Oil and Gas

 

“Orca is currently evaluating several options to increase production to meet forecast gas demand both under the terms of the existing license and any possible license extension. This includes the preparation of a development plan for compression and the drilling of wells in Songo Songo North and their connection to the National Natural Gas Infrastructure. Details including the associated capital cost of this plan will be disclosed as appropriate” says a company in a press release.

In the meanwhile, the company  announces  that David Ross has been named the Chairman of the Board

 David currently holds the position of Non-Executive Director (“NED”) at Orca. Also, Frannie Leautier, Ebbie Haan and Carole Wainaina  have been appointed to hold the position of  Non-Executive Directors   as two of Orca’s existing Non-Executive Directors, William Smith and Glenn Gradeen, step down from the Board effective September 3, 2019

The announcement has followed in support of the company’s current business plan to maximize the value of Tanzanian operations and develop its assets base.

Orca exploration who operates the songo songo gas field in Tanzania through its subsidiary Pan African energy Tanzania Limited announced the appointment of  RBC capital markets to review strategic alternatives for the Company under the direction of a special committee of independent directors, says a press release issued on 5th September 2019.

Also Read:   Five Recent Developments Impacting The Oil and Gas

The review will include the evaluation of alternatives for the return of capital to shareholders and business combination opportunities.

“Orca is currently evaluating several options to increase production to meet forecast gas demand both under the terms of the existing license and any possible license extension. This includes the preparation of a development plan for compression and the drilling of wells in Songo Songo North and their connection to the National Natural Gas Infrastructure. Details including the associated capital cost of this plan will be disclosed as appropriate” says a company in a press release.

In the meanwhile, the company  announces  that David Ross has been named the Chairman of the Board

 David currently holds the position of Non-Executive Director (“NED”) at Orca. Also, Frannie Leautier, Ebbie Haan and Carole Wainaina  have been appointed to hold the position of  Non-Executive Directors   as two of Orca’s existing Non-Executive Directors, William Smith and Glenn Gradeen, step down from the Board effective September 3, 2019

The announcement has followed in support of the company’s current business plan to maximize the value of Tanzanian operations and develop its assets base.

5 Key Recent Developments Impacting The Oil and Gas

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Here are top five articles about recent developments impacting the oil and gas industry in Tanzania and sub-Saharan Africa.

 

Development #1:  Total Suspends Planned $3.5 billion Uganda-Tanzania Oil Pipeline

Total SA has suspended its planned $3.5 billion crude export pipeline from Uganda to Tanzania after the collapse of a deal to buy a stake in Tullow Oil Plc’s oil fields in Uganda.

Full article

Development #2:    South Sudan Makes New Oil Discovery in Adar

South Sudan has made a new crude find in the northern oilfields of Adar and plans production by the end of the year, Information Minister Michael Makuei Lueth said.

Full article

Development#3:   Oil exploration: Panoro Energy announces new discovery in Gabon

The independent Norwegian oil Exploration and Production (E&P) company Panoro Energy ASA has made a new oil discovery further to the drilling of  the Hibiscus Updip well on the Dussafu Marin Permit, offshore Gabon, the company announced on Friday 30th August in a press release.

Full article

Development#4:U.S. Exim Bank Seeks Vote On $5 Billion to Mozambique LNG project.

The U.S. Export-Import Bank said on Thursday its board intends to vote on a $5 billion direct loan for the development of a liquefied natural gas (LNG) project in Mozambique, the bank’s biggest export financing deal in years.

Full article

 

Development #5: Over 1500 youths undergo intense skilling for jobs in oil and gas sector

As part of ongoing efforts to prepare Ugandans for jobs in upcoming infrastructure projects such as oil and gas sector, Solid Rock Uganda is equipping over 1500 youths with intense skills in areas of construction, pipe rifting, carpentry and rigging among others.

Full article

 

 

 

 

Uganda Will be Able To Get Cash To Build the Proposed $3.5 billion Oil Pipeline

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Bloomberg) — Uganda will be able to get the cash it needs to build a planned $3.5 billion oil-export pipeline, with financiers ready to commit funds as soon as a final investment decision is made, according to Stanbic Bank Uganda Ltd.

The project has attracted “a lot of interest” and raising capital “is not a problem,” Stanbic Chief Executive Officer Patrick Mweheire said Tuesday in Kampala. The pipeline, which is crucial to plans by Total SA, Cnooc Ltd. and Tullow Oil Plc to tap the country’s first oil, has faced opposition from lobby groups who have voiced concern over its potential environmental impact.

Uganda, with discoveries of 6 billion barrels of oil resources, is targeting the start of production in 2022, while the 216,000-barrel-a-day pipeline would begin operations the following year. The government has said that an FID to develop the finds and build the pipe could unlock as much as $20 billion of investment.

Read also:Three Industry Experts Share How Collaboration Between Operators and Service Providers Can Drive Cost Effectiveness and Increase Efficiency In Oil and Gas Projects in East Africa.

Standard Bank Group said in June it was reviewing a request by lobbyists to withdraw from funding the proposed pipeline. The lives of as many as 14,500 people along its route could be affected, according to the request, which was signed by organizations including U.K.-based Global Witness.

Stanbic and Japan’s Sumitomo Mitsui Banking Corp. are the lead arrangers for financing of the 900-mile conduit, seeking to raise $2.5 billion in debt funding. Total, Cnooc and Tullow will also provide funds, as will the government.

“There are a lot of people sitting on the sidelines; funding for the pipeline can be raised,” Mweheire said. “We are all working collectively for FID.”

An investment decision on the pipeline, which would run from Hoima in Uganda’s oil region to the Tanzanian port of Tanga, is targeted later this year.

To contact the reporter on this story:
Fred Ojambo in Kampala at fojambo@bloomberg.net

Uganda launches second round of competitive bidding for oil blocks

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Uganda has launched a second round of competitive bidding for five oil exploration blocks in the west of the country, where it has already discovered commercial crude reserves, the energy ministry said.

In a statement posted on its Facebook page, the ministry said a total of 4,928 square kilometres would be offered in the new round.

Energy Minister Irene Muloni, speaking at an oil conference in Kenya’s seaport town of Mombasa on Wednesday, invited investors to take up the blocks, the statement said.

She said many exploration companies were expected to show interest in the blocks, with the current relatively high price of crude oil making an investment attractive.

Uganda launched its first oil block auction in 2015, covering six exploration areas measuring 2,674 square kilometres. Prior to that, the country handed out blocks on a first-come, first-served basis.

Two of the firms that participated in the first round, Australia’s Armour Energy Limited, and Nigeria’s Oranto Petroleum, went on to sign production sharing agreements (PSAs) with the government.

The statement said the ministry would invite interested firms and consortia to submit applications within a period of 6 months after the announcement of the round.

“The licensing round is expected to be concluded with the award of Petroleum Exploration Licenses to successful firms by December 2020.” the statement said.

Uganda first discovered oil in 2006 in the Albertine rift basin which straddles its border with the Democratic Republic of Congo.

Government geologists have said crude reserves of 6 billion barrels have been confirmed with 1.4 billion barrels recoverable.

China’s CNOOC, France’s Total and the UK’s Tullow jointly own the existing fields but commercial production has been repeatedly delayed and is currently seen starting only in 2022.

Uganda, which is landlocked, has signed an agreement with Tanzania for a crude export pipeline which will terminate at Tanzania’s Indian Ocean seaport of Tanga. (Reporting by Elias Biryabarema; Editing by George Obulutsa and Kirsten Donovan)

written by Elias Biryabarem at the Reuter.

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