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The East African : Aug 9th 2015
42 The EastAfrican BUSINESS AUGUST 8-14,2015 OI L & E N E RGY Hopes high as Uganda targets another 8b barrels in oil-rich area Minist≥y of Ene≥gy says this will inc≥ease the count≥y’s volume of oil to ove≥ 15 billion ba≥≥els By GAAKI KIGAMBO Special Correspondent and production licences that will pump fresh energy into its oil and gas sector, it estimates the amount of its undiscovered deposits at over 8 billion barrels. According to a senior offi- A cial at the Ministry of Energy and Mineral Development, this would increase the country’s volume of oil from 6.5 billion barrels to over 15 billion barrels. This would push Uganda’s discovery ratings above most oil producing countries. Currently, its recoverable volumes of 1.4 billion barrels place it just outside the top 10 African countries that have the biggest reserves. “As we plan for the discovered resources, there is a lot of potential that still lies out there. Only some 10 per cent of the Graben that has been licensed,” said Proscovia Nabbanja, acting principal geologist at the Directorate of Petroleum. The competitive licensing round was announced by the energy minister in February to cover six blocks, and exploration licences are expected to be issued before the end of this year, Ms Nabbanja told a meeting organised by Global Rights Alert on gender dynamics in the extractive industries. The ministry had said that it will announce qualified applicants on August 10, and 10 days later issue them proposal/bid Tullow workers at a rig in Buliisa in western Uganda. The government estimates there are undiscovered oil deposits of 8 billion barrels. Pic: File documents and a model production sharing agreements. The discoveries so far made are in less than 20 per cent of the “The absence of major firms among the applicants for the first licensing round is not a measure of the success of the round.” Peninah Aheebwa Graben, whose surface coverage is about 23,000km2 , according to F. A. Kabagambe-Kaliisa, the Energy Ministry Permanent Secretary. “The Albertine Graben is Ugan- da’s most investigated, de-risked and prospective sedimentary basin… Therefore, the six blocks on offer present a great opportunity to discover additional resources that will enhance the sustainability of oil and gas production and commercialisation,” said Mr Kabagambe-Kaliisa. “The government plans to award new petroleum exploration, s Uganda inches closer to announcing new exploration development and production licences before the end of this year,” he added. The six blocks on offer are Mvule (344km2 ka (565km2), Ngassa (416km2 Turaco (425km2 (344km2 ), and Ngaji (895km2 But all the blocks have been ex- plored before without much success. Only Tullow drilled two successful wells in Ngassa. In Turaco, Heritage Oil and Gas reportedly found high concentrations of carbon dioxide. Seismic data According to analysts, the gov- ernment’s strategy is to exhaust their potential considering that it now has more seismic data about the blocks that previous licence holders acquired. Their initial success rate might explain why the Ministry has not succeeded in attracting any bids from major firms like Total and China National Offshore Oil Corporation (CNOOC) — both of which already operate in Uganda. This is in spite of the fact that it even changed the deadline for announcing successful applicants, which it had set for the end of May, and went back to solicit more bids. The companies that expressed interest are from Nigeria (4), South Africa (2), United Arab Emirates (2), Australia (2), and USA (2). Experts say the majority are small, with capability to explore wildcat wells. But the ministry says they are “the right blend” required for exploration, development and production of any additional oil and gas resources in the country. “The aspect of small to mid- sized companies undertaking exploration and subsequently being replaced by large oil companies is an established process in the oil and gas industry worldwide,” said Peninah Aheebwa, acting principal petroleum officer at the Directorate of Petroleum. US agency gives $0.8m to L. Victo≥ia sola≥ p≥oject By KENNEDY SENELWA Special Correspondent THE UNITED States Trade and Development Agency (USTDA) has given Rex Energy a grant of $818,000 to develop a 2MW solar mini-grid project for Tanzania’s Lake Victoria islands as part of the Power Africa project, which is aimed at increasing access to clean energy in sub-Saharan Africa. The USTDA said the project will help to power 5,900 households and businesses in the Lake Victoria region. USTDA director Leocadia Zak said the agency supports President Obama’s Power Africa initiative, which seeks to increase energy access and promote private sector investment in sub- Saharan Africa. Rex Energy managing director Francis Kibhisa said the mini-grid system holds the key to rural electrification in Tanzania and the USTDA grant will help deliver prepaid solar energy to the marginalised rural majority. Transform rural Tanzania “With this grant and technical support from MRIGlobal, Rex Energy complements the government’s efforts to transform rural Tanzania through solar power,” he said. Rex Energy has selected MRIGlobal of Kansas city to carry out a feasibility study and a pilot project. Other US firms that will participate in the project are Homer Energy, Enphase Energy and SunEdison, which is a major solar systems producer and the official Power Africa private sector partner. The US Department of Energy’s National Renewable Energy Laboratory (NREL) will provide expertise on renewable energy resource assessments, analysis and optimisation of the mini-grid design. MRIGlobal chief executive officer Thomas Sack and his SunEdison Rural Electric Utility Company counterpart Cathy Zoi said the programme will improve lives and help grow the local economy. “Solar hybrid mini-grids are the most cost- effective way to bring clean, reliable and affordable electricity to rural communities in Africa,” Ms Zoi said. ), Taitai and Karu), , Kanywataba ). An offshore rig. Oil firms in Somalia are being investigated for corruption. Oil fi≥ms in Somalia p≥obed ove≥ g≥aft claims By KENNEDY SENELWA Special Correspondent BRITAIN’S SERIOUS Fraud Office (SFO) has launched investigations into oil firms operating in Somalia over corruption allegations. The SFO is investigating Soma Oil & Gas Holdings Ltd, Soma Oil & Gas Exploration Ltd, and Soma Management Ltd over payment of about $600,000 to the Somalia Ministry of Petroleum and Mineral Resources under the capacity building agreement. The money is alleged to have been used to bribe senior government officials. The independent government depart- ment responsible for investigating and prosecuting serious and complex fraud, bribery and corruption, said it is seeking information from whistleblowers with insider information. “We welcome anyone with inside infor- mation... We can be contacted through our secure reporting channel, which can be accessed via the SFO website,” it said. The UN investigators, in a report sub- mitted to Security Council, said that officials who had helped in securing Soma’s contract and negotiating the subsequent agreements could have paid the money. Gas deposits Soma Oil & Gas was founded in early 2013 to explore for oil in Somalia. Its board members include former leader of the Conservative Party Michael Howard. In June 2014, the firm concluded ac- quisition of two dimensional seismic data covering 122,000km2 to map potential oil and gas deposits in Somalia. Soma said it had been informed by the SFO that it was investigating an allegation made against the company and the matter is expected to be resolved in the near future, as the firm “always conducts activities in a lawful manner.” “Soma Oil & Gas is confident that there is no basis to the allegation and it is cooperating fully with the SFO to answer its queries. Soma has always conducted its activities in a completely lawful and ethical manner,” it said in a statement. A 2014 UN Somalia-Eritrea Monitoring Group report highlighted transparency and accountability issues in key government institutions, including the Somali Petroleum Corporation and Somali Petroleum Agency that would govern capacity building and regulation.
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