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7/28/2019 An Overview of Uganda's Oil and Gas Sector
1/60
Presented at a
Training Workshop for Senior Editors
by
Africa Centre for Media Excellence Offices, Kampala
18th September, 2012
Ernest N. T Rubondo | COMMISSIONERPetroleum Exploration and Production Department
1
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PRESENTATION OUTLINE
1. Introduction2. Status of the Oil and Gas Sector
Exploration and Development
Investment
3. Legal and Regulatory Framework
4. National Oil and Gas Policy for Uganda
Basis and process of formulation
Progress of Policy Implementation (2008 to date)
5. Expectations from the Media
6. Concluding Remarks
2
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DEVELOPMENTPRODUCTION
INTRODUCTION (1)
THE PETROLEUM VALUE CHAIN
LICENSING
EXPLORATION
DEVELOPMENT
PRODUCTIONDECOMMISSIONING
UPSTREAM
DISTRIBUTION
MARKETING
SALES
TRANSPORTATION
REFINING
GAS PROCESSINGMIDSTREAM
DOWNSTREAM
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LICENSINGEXPLORATIONAPPRAISAL
DEVELOPMENTPRODUCTION
U P S T R E A M M I D S T R E A M D O W N S T R E A M
TRANSPORTATIONREFININGGAS PROCESSING
DISTRIBUTIONMARKETINGSALES
Exploration & Appraisal: Search for petroleumaccumulations , Includes Establishing presence,
Content ease of flow and Extent of distributionDevelopment: Preparing reservoir for Production,Preparing facilities for Collection and Processing
Production: Removal of petroleum from subsurfacereservoirs to the surface, Preparing petroleum forTransportation and Refining
Converting oil and gas intomarketable products andchemicals
Marketing and distribution forCustomer satisfaction and Profitearning
Efficient movement of oil and gasproducts I bulk mainly by
pipeline, road tankers, oceantankers and rail wagons
Introduction (2)
THE PETROLEUM VALUE CHAIN
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SEDIMENTARY BASINS AND THE PETROLEUM SYSTEM
Overburden Rock
Seal Rock
Reservoir Rock
Source Rock
Underburden Rock
Basement Rock
Top Oil Window
Top Gas Window
O O
Sedimentary
Basin
Fill
O
StratigraphicExtent of
PetroleumSystem
Pod of Active
Source Rock
Extent of Prospect/Field
Geographic Extent of Petroleum System
Essential
Elements
ofPetroleum
System
O OO
StratigraphicExtent of Petroleum
System
Extent of Play
SEDIMENTARY BASIN
A depression createdas a consequence ofsubsidence, that fillswith sediment
Thick layers ofsedimentary rocks getlaid down over a long
period of time
Generalized Petroleum System (Source: modified from Magoon and Dow, 1994)
Introduction (3)
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SEDIMENTARY BASINS OF AFRICA
Sedimentary Basin in Africa
Introduction (4)
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POTENTIAL FORPETROLEUM EXPLORATION
Albertine Graben1
Hoima Basin
Lake Kyoga Basin
Kadam-Moroto Basin
2
Lake Wamala Basin
Lake Victoria Basin3 LakeEdward
Lake
George
LAKE
VICTORIA
Lake
Wamala
HOIMA BASIN
LAKE WAMALA
BASIN
LAKE KYOGABASIN
LAKE
KYOGA
Sedimentary Basin in Uganda (Source: PEPD)
Introduction (5)
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
1920 1945: PRELIMINARY EXPLORATION
Reporting of oil seepages
Drilling of Waki-B1 in 1938 by Anglo European
Investment Company
Shallow stratigraphic wells drilled in Kibiro,Butiaba and Kibuku based on oil seeps
8
HISTORY OF PETROLEUM EXPLORATION
1945 1980: STAGNATION
Initially due to World War II
Change in Colonial Policy
Later due to political uncertainties
Stratigraphic wells and early oil seep reporting (Source: PEPD)
Lake
Albe
rt
River Kafu
UGANDA
D.RCON
GO
0 50 km
LEGEND
Rift Sediments
International Boundary
Major Roads
Faults
Rivers
HOIMA
MASINDI
FORT PORTAL
MAHAGI
N
Oil Seep
Statigraphic Wellsown
20 N
10 N
20 N
10 N
310 E
310 E
13 Shallowwells (1956)
9 Shallow wells(1956)
20 Shallowwells (1956)
Introduction (6)
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HISTORY OF PETROLEUM EXPLORATION
1980 to Date: CONSISTENT AND MODERN EFFORTS
Aero magnetic survey carried out in 1980.
Petroleum Law enacted in 1985.
Intensive promotion led to attraction of investment
The first seismic data was acquired in the country1998 by Heritage Oil and Gas in Semliki Basin
In 2002, the Second deep well, Turaco-1 wasdrilled in the country since 1938
First Commercial discovery of crude oil in 2006
Further discoveries of new oil and gas made
Drilling of the Turaco-1 well
Introduction (7)
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STATUS OF THE OIL AND GAS SECTOR
10
EXPLORATION
AND APPRAISAL
DEVELOPMENT
AND
PRODUCTIONINFRASTRUCTURE
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The Albertine Graben is subdivided into17 Licence Areas
Five (5) Active Production SharingAgreements (PSAs)
4 License Operators (Tullow, Total,CNOOC and Dominion)
Licensing is currently on halt awaitingcompletion of a new regulatoryframework for the sector.
Future Licensing to be undertakenthrough competitive bidding
Licensees in the country changing fromsmall to major oil companies.
ACREAGE/LICENCES
RiverKatonga
River Kafu
UGANDA
TANZANIA
RWANDA
SUDAN
DEMOCRATICREPUBLIC OF CONGO
0 50 km
N
LakeEdward
Lake
Alb
ert
RiverS
emliki
LakeWamala
VictoriaNile
Alb
ert
Nile
LakeGeorge
LAKE VICTORIA
EA5B
EA2
EA3AEA3B
EA3C
EA3D
EA4A
EA4C
EA4D
EA1A
EA1
EA5A
EA4B
30 N
20 N
10 N
00
10 S
30 N
20 N
10 N
00
10 S
32 0 E31 0 E30 0 E
32 0 E31 0 E30 0 E
Status of Licensing in the Albertine Graben (Source: PEPD)
LEGEND
Rift Sediments
Open Exploration Area
EA1 Licensed to Total E&P (U) B.V,
Tullow Uganda Ltd and CNOOC (U) Ltdon 3rd February 2012
EA4B Licensed to Dominion PetroleumLtd on 27 th July 2007
Buliisa Discovery Area under appraisalby Total E&P (U) B.V, Tull owUgandaLtd and CNOOC (U) Ltd
Kingfisher production licence to TotalE&P (U) B.V, TullowUganda Ltd andCNOOC (U) Ltd on 3rd February 2012
River
International Boundary
Paara Discovery Area under appraisalby Total E&P (U) B.V, Tull owUgandaLtd and CNOOC (U) Ltd
Kaiso-Tonya Discovery Area underappraisal by Total E&P (U) B.V, Tull owUganda Ltd and CNOOC (U) Ltd
Kanywataba Prospect Area licence toTotal E&P (U) B.V, Tullow Uganda Ltdand CNOOC (U) Ltd on 3rd Feb 2012
Status of the Oil and Gas Sector(2)
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Status of the Oil and Gas Sector(3)
12
DATA ACQUIRED
Large amounts of geological, geophysical and engineering
data acquired by the Ministry mainly to attract investment
Over 10,000 km2
the area around the sedimentarybasins above has been geologically mapped for
petroleum exploration
7,500 line km of gravity and magnetic data
9,578 line km of aeromagnetic data
GRAVITY, MAGNETIC AND GEOLOGICAL MAPPING
50 0 50Km
(Kilometers)
Arc 1960 / UTM zone 36N
-217.9 -176.8 -158.4 -148.3 -142.4 -137.6 -132.4 -125.4 -119.8 -116.5 -111.3 -92.7
Gravity anomaly(mGals)
LEGEND
International boundary
Roads
Lakes
Exploration Areas
-100'
-030'
000'
030'
100'
130'
20
0'
230'
300'
33
0'
-1
00'
-0
30'
0
00'
0
30'
1
00'
1
30'
2
00'
2
30'
3
00'
3
30'
2930' 3000' 3030' 3100' 3130' 3200'
2930' 3000' 3030' 3100' 3130' 3200'
612-
8
0
2
-
80
2-
00
2-
29
1-
481-
481-
-1
76
6
7
1-
67
1-
-1
6
8
86
1
-
86
1-
-16
0
- 160
061-
061-
-15
2
-
1
5
2
-152
-1
52
25
1-
251
-
-
1
4
4
44
1-
4
4
1
-
441
-
-
1
4
4
44
1
-
4
4
1
-
-1
36
63
1-
6
31-
-
1
3
6
-1
36
631 -
63
1-
63
1-
-1
3
6
-
1
2
8
-1
28-
12
8
-
1
2
8
821-
-
1
2
8
82
1-
821-
-1
20
-12
0
0 2 1 -
02
1-
02
1-
0
2
1-
021
-
-
1
1
2
-1
1
2
-11
2
21
1-
211-
-1
04
-10
4
4
0
1-
-
1
0
4
401-
401-
-
9
6
69
-
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DATA ACQUIRED
LAKE VICTORIA
LakeEdward
Lake
George
Lake
Alb
ert
RiverS
emliki
RiverKatonga
RiverKafu
LakeWamala
UGANDA
TANZANIA
RWANDA
SUDAN
DEMOCRATIC REPUBLIC
OF CONGO
VictoriaNile
0 50 km
N
LEGEND
Rift Sediments
Oil well
Oil and Gas well
Gas well
Drywell
2-D seismic line
Area Boundary
3-D seismic coverage
ITI-1
AVIVI-1
NGAJI-1
MVULE-1
KINGFISHER-1KINGFISHER-2KINGFISHER-3
TURACO-1, 2 &3
MPUTA-1, 3, 4 &5
NZIZI-1, 2 &3
WARAGA-1
MPUTA-2
NGASSA1 &2
KARUKA-2
TAITAI-1WAKI-1
KARUKA-1
NSOGA-1&5
MPYO-1&3
JOBI-EAST-5
JOBI-EAST-1&2JOBI-1&2
RII-1
NGIRI-1
KASAMENE-1,2&3
NGEGE-1&2KIGOGOLE-1,2,3,4,5&6
NGARA-1AWAKA-1
Oil shows
30 N
20 N
10 N
00
10 S
30 N
20 N
10 N
00
10 S
320 E310 E300 E
320 E310 E300 E
7,194 line km of 2-D seismic data
1,608 km2 of 3-D seismic data, on land
and Lake Albert The data acquired was used to identify
hydrocarbon Prospects and Leads in theAlbertine Graben
Some of the Prospects have beenfollowed up by drilling
SEISMIC DATA
Status of the Oil and Gas Sector(4)
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DATA ACQUIREDWELLS DRILLED
Drilling success trend (Source : PEPD)
JOBI DISCOVERY
JOBI-1
JOBI-2
JOBI-2A
JOBI-3
RII DISCOVERY
RII-1
NGIRI DISCOVERY
NGIRI-1
NGIRI-2
NGIRI-3
MPYO DISCOVERY
MPYO-1
MPYO-3
GUNYADISCOVERY
GUNYA-1
NGEGEDISCO VERY
NGEGE-1
NGEGE-2 & 2A
NGEGE-3
NGEGE-4
NGEGE-5
NGEGE-6
NGARADISCOVERY
NGARA-1
KIGOGOLEDISCOVERY
KIGOGOLE-1
KIGOGOLE-2
KIGOGOLE-3
KIGOGOLE-4
KIGOGOLE-5
KIGOGOLE-6 &6A
TAITAI DISCOVERY
TAITAI-1
TAITAI-1A
KASAMENE &WAHRINDHI
DISCOVERIES
WAHRINDI-1
KASAMENE-1
KASAMENE-2
KASAMENE-3&3A
NSOGADISCOVERY
NSOGA-1
NSOGA-2&2A
NSOGA-5
KARUKADISCOVERY
KARUKA-1
KARUKA-2
NGASSADISCOVERY
NGASSA-1
NGASSA-2
WARAGADISCOVERY
WARAGA-1
MPUTADISCOVERY
MPUTA-1
MPUTA-2
MPUTA-3
MPUTA-4
MPUTA5
NZIZI DISCOVERY
NZIZI-1
NZIZI-2
NZIZI-3
KINGFISHER DISCOVERY
KINGFISHER-1&1A
KINGFISHER-2
KINGFISHER-3&3A
TURACO DISCOVERY
TURACO-1
TURACO-2
TURACO-3
NGAJI-1
MVULE-1
ITI-1
AVIVI-1
AWAKA-1
KANWYATABA-1
Status of the Oil and Gas Sector(5)
1 1 1 1
5 5
139 10 8
223
3
2
0
1
2
3
4
5
6
7
8
0
5
10
15
20
25
30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Proje
Nu
mberofAcreages
NumberofWells
YEAR
DRILLING SUCCESS TREND IN THE ALBERTINEGRABEN
Discovery
90%
10%
DRILLING SUCCESS RATE
Success
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t15
DISCOVERIES AND RESOURCES
20 oil and/or gasdiscoveries made to date
Over 3.5 billion barrels ofSTOIIP established
Estimated 1.0 billion barrelsof recoverable oil equivalent
Appraisal of the discoveriesis ongoing
Less than 40% of theAlbertine Graben has beenevaluated
Lake
Alb
ert
RiverS
emliki
River Kafu
UGANDA
DEMOCRATIC REPUBLICOF CONGO
VictoriaNile
Alb
e
0 50 km
N
LEGEND
Rift Sediments
Exploration Area Boundary
Oil Discovery
Oil and Gas Discovery
Gas Discovery
20 N
10 N
20 N
10 N
320 E310 E300 E
320 E310 E300 E
Kingfisher
NgassaMputaNzizi
Waraga
KasameneWaihrindiNsogaNgegeKigogoleNgara
JobiRiiNgiriMpyo
Gunya
Discoveries in the Albertine Graben (Modified from Rubondo et al., 2011 and Ongodia, 2011)
Status of the Oil and Gas Sector(6)
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DISCOVERIES AND RESOURCES
This resource base now put Uganda in the league of countries like Peru,
Trinidad and Tobago, Denmark, Italy and Romania
Chad, Congo Brazaville, Equatorial Guinea and Tunisia in Africa
Brunei and Thailand in Asia; among others
It is also still a long way from the tens of billion in Nigeria, Libya and the
USA or the hundreds of billions of barrels in Iran, Iraq, Kuwait, Venezuela
or Saudi Arabia
Status of the Oil and Gas Sector(7)
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ONGOING WORK
Status of the Oil and Gas Sector(8)
EXPLORATION
Kanywataba Prospect Area
The Kanywataba-1 well was drilled by CNOOC (U) Ltdin the Kanywataba Prospect area, on the southern
edge of Lake Albert The Total Depth (TD) was 2,103m BRT
Exploration Area 1A
GORE Geochemical surveys concluded during June
2012. Samples collected are currently being analyzed TOTAL E&P (U) b.v acquired Full Tensor Gradiometry
(FTG) data to further optimize on the planning for the2D and 3-D seismic survey in EA1 and 1A
Plans to commence drilling exploration wells at the end
of this year.
The Kanywataba-1 exploration well
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ONGOING WORK
Status of the Oil and Gas Sector(9)
APPRAISAL
Exploration Area 2
Kasamene Waraga Ngege Nsoga
Kigogole Waihrindi Ngara
Wells drilled in the Albertine Graben and discoveries made (Source: PEPD)
Exploration Area 1
Jobi Rii
Mpyo
Ngiri Gunya
Jobi-East
PRODUCTION LICENCES
Production Licence Applications have beenreceived for the Mputa and Nzizi discoveries andare under consideration. Kingfisher discoveryawaiting submission of an acceptable FDP.
JOBI DISCOVERY
JOBI-1
JOBI-2
JOBI-2A
JOBI-3
RII DISCOVERY
RII-1
NGIRI DISCOVERY
NGIRI-1
NGIRI-2
NGIRI-3
MPYO DISCOVERY
MPYO-1
MPYO-3
GUNYA DISCOVERY
GUNYA-1
NGEGE DISCOVERY
NGEGE-1
NGEGE-2 & 2A
NGEGE-3
NGEGE-4
NGEGE-5
NGEGE-6
NGARA DISCOVERY
NGARA-1
KIGOGOLE DISCOVERY
KIGOGOLE-1
KIGOGOLE-2
KIGOGOLE-3
KIGOGOLE-4
KIGOGOLE-5
KIGOGOLE-6&6A
TAITAI DISCOVERY
TAITAI-1
TAITAI-1A
KASAMENE &WAHRINDHI
DISCOVERIES
WAHRINDI-1 KASAMENE-1
KASAMENE-2
KASAMENE-3&3A
NSOGA DISCOVERY
NSOGA-1
NSOGA-2&2A
NSOGA-5
KARUKA DISCOVERY
KARUKA-1
KARUKA-2
NGASSA DISCOVERY
NGASSA-1
NGASSA-2
WARAGA DISCOVERY
WARAGA-1
MPUTA DISCOVERY
MPUTA-1
MPUTA-2
MPUTA-3
MPUTA-4
MPUTA5
NZIZI DISCOVERY
NZIZI-1
NZIZI-2
NZIZI-3
KINGFISHER DISCOVERY
KINGFISHER-1&1A
KINGFISHER-2
KINGFISHER-3&3A
TURACO DISCOVERY
TURACO-1
TURACO-2
TURACO-3
MVULE-1
ITI-1
AVIVI-1
AWAKA-1
KANWYATABA-1
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INVESTMENTS IN THE SECTOR (1)
19
INVESTMENTS MADE
1st Major Discovery
0 0 0 0 12 3
4
9
14
27
36
49
60
82
0
10
20
30
40
50
60
70
80
90
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Projections
No.
ofWellsdrilled
Investment(US$milion)
YEAR
INVESTMENT TREND IN THE OIL AND GAS SECTOR
Cummulative Investment Cuumulative No. of Wells
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INVESTMENTS IN THE SECTOR (1)
20
INVESTMENTS MADE
Industry is capital intensive and high risk
At the end of 2011 the investment made mainly in risk capital invested in seismicsurveys, exploratory and appraisal drilling was over $1.3 billion
Sharp increase in investment at first discovery
This is significant investment and will rise to many fold with further investmentsexpected in field development, production of the crude oil, processing andtransportation facilities
The costs incurred in the sector in the country so far are classified as FindingCosts
Means the costs of finding commercial reserves of oil in USD per barrel
On the global scale, the finding costs range between $5 - $25 per barrel
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RECOVERABLE COSTS
ACM BUDGETAPPROVAL
FIELD MONITORINGBY MEMD
COST RECOVERYAUDIT
APPROVAL OFPROCUREMENTPROCEDURE
The Advisory Committee
receives, considers and
approves work programme &
budget on an annual basis
To ensure that the proposed
budget is acceptable
Composed of MEMD,
MoFP&ED, MoJ&CA and the
Licensees
Licensees expected to
develop the Procurement
procedures in
consultation with GoU
MEMD currently working
with the PPDA to
develop a harmonizedProcurement procedure
MEMD monitors activities
of licensees on 24-hour
basis
To ensure that work
programme are
implemented as agreed
and in accordance withapproved budgets
The Auditor General (AG)
has overall mandate of
scrutinizing the costs
The AG finally approves the
expenditure that should be
recovered by the licensees
The AG and hence
Parliament has the mandate
to suggest improvements
where necessary
Multiple licences National Oil Company
Investments in the Sector(2)
MINIMUM LICENCEWORK PROGRAM
The PSA provides
for minimum work
programme
commitment
A minimum level of
exploration work
guaranteed by theframework
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
Ugandas Petroleum Exploration and Production is Governed by:
The Petroleum (Exploration and Production) Act 1985, Cap 150,Laws of Uganda ( revised in 2000)
Petroleum (Exploration and Production) (Conduct of ExplorationOperations) Regulations, 1993
Environment, Wildlife, Water , Income Tax, Land, Statutes andGuidelines
The National Oil and Gas Policy for Uganda, 2008
22
LEGAL AND REGULATORY FRAMEWORK)
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Production Sharing Agreements
Fiscal Systems (Petroleum Contracts) used around the
world;
Concessions / Royalty/Tax Agreements
Company acquires a right to explore and develop hydrocarbons at its sole risk and
agrees to pay royalties, income taxes, petroleum revenue taxes etc in accordance
with the laws and regulations of the host govt.
The govt grants title to resource rights to the concessionaire company has all the
control on production rates and marketing (pricing and lifting).
Govt looked at as a simple tax collector
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Service Contracts
The contractor is paid a fee for services.
Title to the petroleum stays with govt
These are mainly at the stage of production, after
discovery because then the risk is reduced
Production Sharing Agreements(2)
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
Production Sharing Agreements (PSAs)
Basic elements
The company is a contractor to host govtHost govt and contractor share in all productionTitle to the resource remains with government until the
point of saleGovt maintains control of operations (usually through
a national oil company) either directly or through amanagement committee
The contractor required to provide technology andfinancing
Production Sharing Agreements (3)
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(PSAs) contd
Equipment purchased and imported by the contractorbecome property of government
Exploration expenditures met by the contractor onlyrecoverable in case of a discovery
Company bears the entire exploration riskGovt has option to participate and be carried through
development to productionRing-fencing costs incurred in one contract area or field
cannot be recovered from production from anothercontract area or fieldCost recovery or cost oil limit
Production Sharing Agreements (4)
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Production Sharing Agreements (5)
(PSAs) contd
Profit oil and gas sharing revenues remaining afterroyalty and cost recovery shared between government andthe contractor
The contractors share of profit oil and gas is taxed
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Production Sharing Agreements (6)
Why we Chose PSA
Title to petroleum remains with Government
Govt has a say on production rates (very key), marketing
etc
Capacity to monitor the expenses had not been built
Secure early revenues to government through royalty and
cost recovery limit and therefore early share of profit
THE NATIONAL OIL AND GAS POLICY
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
The National Oil and Gas Policy (NOGP) is thekey document providing guidance to the Oil andgas sector in Uganda.
It was developed to address issues ofexploration, development, production andutilisation of the countrys oil resources followingthe discovery of commercial oil reserves in 2006.
NOGP was approved by cabinet in January 2008after a thorough consultative process.
29
THE NATIONAL OIL AND GAS POLICY
FOR UGANDA
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
Key Policy objectives for the oil and gas sector before the National Oil and GasPolicy for Uganda were covered in the Energy Policy of 2002 and these were;
1.Capacity building and institutional development,
2. Investment promotion through acquisition of field geological, geophysical andgeochemical data and attraction of oil companies to invest; and
3. Monitoring compliance of agreed work programs, budgets and environmentprotection.
The discovery and confirmation of commercial reserves of petroleum in the countrybrought about new issues that necessitated putting in place a NATIONAL OIL ANDGAS POLICY for the country.
30
National Oil and Gas Policy for Uganda (2)
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
Policy Goal:TO USE THE COUNTRYS OIL AND GAS RESOURCES TO
CONTRIBUTE TO EARLY ACHIEVEMENT OF POVERTY
ERADICATION AND CREATE LASTING VALUE TO SOCIETY.
Policy has ten objectives, each with strategies and actions.
Policy available in print and website;www.petroleum.go.ug
An abridged and translated version of the policy is being developed.
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National Oil and Gas Policy for Uganda (3)
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t
1. Efficient Licensing Objective 1
On-going formulation of new petroleum legislation
Presentation of new petroleum legislation in parliamentFebruary 2012 (Petroleum(Exploration, Development and Production) Bill2012 and Petroleum (Refining, GasProcessing and Conversion, Transportation and Storage) Bill).
Halt in licensing of new acreage since first discovery in 2008.
Over 10,000 km2 out of 20,000 km2 originally licensed area with high productive
potential has been relinquished in addition to available unlicensed areas. Over
16,000 km2 is now available for licensing.
Over 80 applications received are kept in data bank.
Due diligence undertaken on these and some companies purchase data and reportsafter signing confidentiality agreements
Gradual and Competitive licensing as a way of prolonging production and
efficient resource management.
Open Bidding Rounds will be the form of licensing
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Status of Policy Implementation (2008 to 2012)
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2. Establish and Manage Countrys Resource Potential
Objective 2
Resources in 2006 were 300 million barrels of oil in place.
Today the resources are over 3.5 billion barrels of oil in
place and over 1.0 billion barrels are recoverable.
The National Petroleum Data Repository Systems areunder establishment.
Creation of new institutions (Petroleum Authority, National
Oil Company, Directorate of Petroleum)-once bills are
passed into law. Strengthening existing institutions :
33
Status of Policy Implementation (2)
DATA REPOSITORY CENTREDATA REPOSITORY CENTRE
INHOUSE DATA INTERPRETATION
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3. Efficient production Objective 3
No commercial production yet, but an extensiveExtended Well Testing (EWT) programme beingundertaken.
Issued a production licence for Kingfisher field(February 2012) to be effective in one year.
Government has received:
Applications for production licences over
Waraga, Kingfisher, Nzizi and Mputa fields andthese are being reviewed.
Oil Companies are due to submit
Field development plans for Kasamene,
Wahrindi, Kigogole, Nsoga, Ngege and Ngara.34
Status of Policy Implementation (3)
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P e t r o l e u m E x p l o r a t i o n a n d P r o d u c t i o n D e p a r t m e n t35 Refinery Distribution in Africa (Source: CITAC)
Two strategies;
a) Early Commercialization Integrated Power Project
b) Refinery Development
Status of Policy Implementation (4)
4. Valuable utilisation of the resources Objective 4
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Early Commercialization Integrated Power
Project
Value Addition and Integrated Power Project
Pre-FEED activities including geotechnical surveysfor infrastructure for the gas processing centre andpipeline routes have been completed
Power Generation
Deliver natural gas as the initial feedstock to supplya 50MW dual power station
Additional to gas, crude oil (HFO) from extendedwell tests to increase capacity and life of the projectto 25 years
Potential industry markets for the test crude are
also being explored
Test Crude from:Jobi, Rii, Ngiri
Test Crude from:Kasamene, Nsoga, Ngege,Kigogole, Wahrindi
MputaWaragaNzizi
KABALE POWERPLANT
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A Regional Refineries Development
Strategy (RRDS) was developed andapproved in 2008 by EAC memberstates
The strategy aims at:
Harmonized planning anddevelopment of refineries in the East
African Community
Sustainable utilisation of crude oilresources in the region.
EAC has only one refinery of 70,000bbl/d but operates at 35,000bbl/d.
The region is currently consumingclose to 200,000 bbl/d and demand isgrowing
Refinery Development
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Refinery Development (2)
Value Addition and Refinery Development
A detailed refinery feasibility study for thedevelopment of a refinery in Uganda was
conducted in 2010/11 and assessed;Crude production potentialNational and Regional Petroleum Product
DemandRefinery size and configurationLocationFinancing options
The study analysed the option of crude export pipelineverses refinery development
Study confirmed that refinery development is moreeconomically feasible and beneficial than export of crude oil
Six different locations were assessed and Kabaale (29Km2),close to the oil fields in Hoima district was recommendedbased on the waxy crude type that is difficult to transportover long distances
Feasibility Study for Refining (Source: MEMD)
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Base case refinery of 60,000 bbl/d was recommended
Phased development to be considered starting with 20,000 bbl/day Capacity to be expanded in future to 60,000 bpd and to 120,000 bpd or 180,000 bpd
NPV for base case 60,000 bbl/d US $ 3.2 billion, Post tax rate of return of 33%
Crude export pipeline tariff (60,000 bbl/d) at post tax ROR of 10% is US$ 13.35/bbl
Feasibility study is now available for purchase
Mild Hydrocracker / FCC / Coker and HCK/ Coker design options are being considered
Processes of Acquisition of land in Kabaale, Buseruka Subcounty, Hoima for refinerydevelopment is on-going;
Survey of the land was undertaken by the Ministry of Lands Housing & Urbandevelopment (MoLHUD)
Sensitisation of affected communities is on-going and preparation of the ResettlementAction Plan.
Procurement of a Transaction Advisor for the Refinery on-going
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Medium-large refinery
Refinery Development (2)
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REFINERY DEVELOPMENT STEPS
FEASIBILITY STUDY
COMMISSIONING
Land Acquisition
Logistics Assessment Study
Environmental Baseline Study
Identify Developer
FEED
Detailed EIA
EPC
2011 2015 (Expected commissioning of Phase-1)
Government to work with partners withtechnical knowledge and required capitalthrough Private Public Partnership (PPP)
Refinery Development (3)
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Benefits of Refining in Uganda
Reduce over reliance on foreign importation of petroleumproducts
Help alleviate fuel shortages and facilitate regionaleconomic growth
Provide employment to local and national population esp.at construction stage
Infrastructure development in the local areas e.g. Roads,health centers
Refinery Development (4)
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5: Promotion of suitable transport and
storage solutionsObjective 5
A petroleum transportation and storage study for thecountry has commenced.
A study to evaluate development of pipelines andstorage facilities for crude oil and gas in Ugandahas been concluded.
Two routes; Northern and Southern to a centralhub/refinery - Northern (96 km, 16 inch) andSouthern (46 km, 12.75 inch)
The second part of the study will covertransportation and storage of petroleum productsfrom the refinery to markets is ongoing and will becompleted this year.
Commencement of the construction of Kaiso-TonyaRoad and design of other roads is ongoing.
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Status of Policy Implementation (5)
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6: Collection of the right revenues and utilisation to create lasting value Objective 6
Petroleum Revenue Management Policy in place.
Public Finance and Accountability Act (PFA) reviewed to put in place legislation for
petroleum revenue management; PF bill tabled in Parliament
Tax legislation updated and Macro-Economic Framework is being revisited.
Capacity Building in tax policy/ administration and Petroleum Fund Asset
Management.
Resolution of tax dispute on the sale of Heritage assets is an example of an effort to
ensure collection of right revenues
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Status of Policy Implementation (6)
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7. Optimum National Participation Objective 7
Concluded a study on the opportunities and challenges forUgandans participation inthe oil and gas sector in September 2011 and recommendations are under
implementation.
Copy of the study is on www.petroleum.go.ug
Oil companies are being compelled to employ Ugandans and give business
opportunities to Ugandan companies.
Several aspects of local content have been included in the petroleum resource bill.
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Status of Policy Implementation (7)
NATIONAL PARTICIPATION IN THE OIL AND
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OPPORTUNITIES FOR THE COUNTRY
NATIONAL PARTICIPATION IN THE OIL AND
GAS SECTOR (1)
Production Sharing Agreements (PSAs) provide for State Participation in therange of 15% to 20%
This provides an important opportunity to optimize value for the country inthe oil and gas activities by directly participating in, among others; Decision Making
Controlling of Costs
Capacity Building in strategic ,managerial and technical roles of the industry
IOCs80%
Government(max)
20%
MAXIMUM RANGE OF STATE PARTICIPATION
National Participation in the Oil and Gas
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NATIONAL ENTREPRENEURS
National Participation in the Oil and Gas
Sector(2)
SERVICES TYPE UGANDAN SUPPLIERS
CIVIL WORKS/
ENGINEERING
Kagga & Partners Tegeka ConstructionPearl Engineering Kasese Nail & Wood LtdExcel Construction Strategic Logistics
MEDICAL Frontier Medical AON Uganda LtdMusalaba Mwekudu
CLEARING AND
FORWARDING
Bemuga ForwardersThree ways shipping services Co.Momentum LogisticsEast Africa Cranes
Environment services Amec Earth and Environment ServicesAir water and Earth.Environmental Assessment ConsultantsRHK CONSULTING Engineering LTD
SECURITY G4S securitySaracen
CATERING Mineral Services LimitedEquator Catering servicesJose Catering
Mining Services Limited
National Entrepreneurs are actively involved in provision of
services in the sector. Examples;
National Participation in the Oil and Gas
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National Participation in the Oil and Gas
Sector(3)
Well pad services Communications
1. Excel Construction Ltd2. Kasese Nail & Wood LTD
3. Strategic Logistics
4. Pearl Engineering Limited
1. MTN Uganda Ltd2. Orange Uganda Ltd
Environment services(Consultations) Rig Services( Movement and Mud logging)
Amec Earth and Environment Services
Air water and Earth.
Environmental Assessment Consultants
RHK CONSULTING Engineering LTD
1. Three ways
2. Multiline International
Freight Forwarders/Courier services Equipment lifting services
1. Bemuga Forwarders.
2. Momentum Logistics
3. Three ways Shipping services
1. East Africa Cranes Ltd
2. Bemuga Forwarders
Engineering services Office Facilities and EquipmentKagga & Partners
Pearl Engineering
MBW Consultants
Excel construction
Tegeka Companies
Service and Computer Industries Ltd
Uganda Printing and Publishing
Uganda Railways Corporation
MSL Logistics
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National Participation in the Oil and Gas
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National Participation in the Oil and Gas
Sector(4)
Well pad services Communications
1. Excel Construction Ltd2. Kasese Nail & Wood LTD
3. Strategic Logistics
4. Pearl Engineering Limited
1. MTN Uganda Ltd2. Orange Uganda Ltd
Environment services(Consultations) Rig Services( Movement and Mud logging)
Amec Earth and Environment Services
Air water and Earth.
Environmental Assessment Consultants
RHK CONSULTING Engineering LTD
1. Three ways
2. Multiline International
Freight Forwarders/Courier services Equipment lifting services
1. Bemuga Forwarders.
2. Momentum Logistics
3. Three ways Shipping services
1. East Africa Cranes Ltd
2. Bemuga Forwarders
Engineering services Office Facilities and EquipmentKagga & Partners
Pearl Engineering
MBW Consultants
Excel construction
Tegeka Companies
Service and Computer Industries Ltd
Uganda Printing and Publishing
Uganda Railways Corporation
MSL Logistics
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National Participation in the Oil and Gas
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EMPLOYMENT BY OIL COMPANIES Licensed companies in the country
are employing an increasingnumber of 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% are
expected to be Ugandans These numbers are expected to
increase as more Ugandansacquire skills in the oil and gassector.
National Participation in the Oil and Gas
Sector(5)
National Participation in the Oil and Gas
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INTERNATIONAL OIL SERVICES COMPANIES
Some of the worlds largest oil service companies now resident andhave opened bases and yards in the country;
Schlumberger; US$79.57 billion
Halliburton; US$24.64 billion
Baker Hughes; US$16.74 billion
Weatherford; US$8.91 billion
These service companies are also providing training and employmentopportunities to Ugandans
National Participation in the Oil and Gas
Sector(6)
St t f P li I l t ti
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Skills requirement study for the oil and gas in the country hasbeen planned and is due to be undertaken starting later this
year.
Commencement of Uganda Petroleum Institute Kigumba
artisans and technicians.
First intake of 28 students is due to graduate during 2012 and areundergoing industrial training in Trinidad and Tobago
Second intake of 60 students commenced studies during 2011.
Undergraduate and post graduate studies in Petroleum
Geoscience at Makerere University.
The third intake of 80 students commenced studies in 2012/13
Second intake of 46 and first intake of 50 students commenced
studies in 2011/12 and 2010/11 respectively
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Status of Policy Implementation (8)
Support to Makerere University by Schlumberger with US$ 4m for technical software, hardware and training
Private institutions introducing petroleum related courses.
Increased training of Ugandans in oil and gas professions abroad for both public and private players
8. Development and Maintenance of National Skills and Expertise - Objective 8
St t f P li I l t ti
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9. Environment Conservation Objective 9
Environment and Social Impact Assessment studies are undertaken for all activities in thesector.
Environment Sensitivity Atlas for the areas where petroleum has been discovered in thecountry was developed.
Strategic Environment Assessment of these areas is on-going.
Environment Monitoring Plan and guidelines have been developed.
Oil spill Contingency Plan and mechanism for hazardous waste management plan is on-going.
Multi-Institutional monitoring team - Biodiversity Institutions working together to efficientlymanage the interface between petroleum and the environment.
Updating of standards, guidelines and regulations by biodiversity institutions
Land use planning is in progress. The Albertine Graben is a special planning area; Planning52
Status of Policy Implementation (9)
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10. Mutually beneficial relationships among
stakeholders- Objective 10 A communication strategy for the sector was
developed and its Implementation is on-going through;
1. Engagements with Civil Society, Parliamentand other stakeholder groups
2. Engagements with leaders and communitiesof districts in the Albertine Graben
3. Participation in Radio and Television talkshows
4. Pro-active Media Relations
5. Website www.petroleum.go.ug
Consultations and dialogue withstakeholders continues.
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Status of Policy Implementation (10)
Editors at Jobi-3 well site in Murchison Falls National Park in July 2012
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Action (iii) of Objective 10 of the NOGP provides for putting in place a Communication
Strategy for the Oil and Gas Sector .
The objectives of the strategy are to;a) Bring about communication leadership, and foster a coordinated approach to communication by multiple
actors.
b) Meet the information needs of the stakeholders through regular information dissemination, exchange andsharing.
c) Promote an accurate and balanced image of the oil and gas sector through proactive communication.
d) Establish an implementation structure to synchronise internal communication within the MEMD, betweenother government institutions active in the sector and other stakeholders.
Can be accessed on www.petroleum.go.ug
Provides for, among others, Specific Engagement with the Media; Training, Meetings,field visits, Press conferences, Media Contact List, Designated a spokesperson, amongothers:
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COMMUNICATION STRATEGY
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a) Engagements Organised;
Breakfast meeting for Senior Editors (40) on 31st
August, 2011 Workshop for News/ Business Reporters (50) on 2nd September, 2011
Training Workshop for Parliamentary Reporters (65) on 28th November 2011
A breakfast meeting for Editors (50) and a Workshop for Journalists (65) were held on 28thMarch 2012 and 30th March 2012 respectively;
Improve awareness about the developments in the Oil and Gas Sector Enhance communication flow between Government and media
Update the on the recent developments
b) Engagements Facilitated;
Various training workshops for journalists organised by the African Centre for Media Excellence
(ACME) held on 21st Nov, 2011, 30th January, 14th May, 21st
August, 2012. A training for reporters organised by UEJA on 28th October, 2011
A presentation made to the Senior Editorial Staff of the New Vision on 8th May 2012 with theview to improve the reporting on oil and gas issues by their staff and also develop partnershipswith the experts and their organizations.
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Communication Strategy (2)
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c) Media Visits to Operations in the Albertine Graben
1. Following an orientation Workshops for the Media, MEMD organised two visits to the Albertine Grabenfor 25 journalists, which was undertaken between 19 th to 22nd January 2012 and for 20 Editors and 5journalists between 19th and 22nd July, 2012.
2. Facilitated a three field visits for journalists undergoing a training programme on oil and gas reportingunder ACME. The visits took place on 5th and 18th February, 2012, and 29th April, 2012.
d) Designated spokesperson for the Ministry
Mr. Bukenya Matovu, Senior Assistant Secretary/ MEMD has been delegated the responsibility of a beingthe official spokesperson for the Ministry, including on oil and gas issues and is accessible to the mediafor comment on various issues.
OBJECTIVES OF PROACTIVE MEDIA RELATIONS;
Improve awareness about the developments in the Oil and Gas Sector
Enhance communication flow between Government and media
Update the on the recent developments Challenge of high staff turnover in the media mitigated organising and facilitating such engagements.
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Communication Strategy (3)
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Appreciate the progress and achievements that have been made in the sector.
Oil and Gas Industry Characteristics (High Risk Industry, High Reward, Capital intensive, Internationaland has potential to disrupt other sectors and can also be easily disrupted) require responsible media toavoid disruption of the sector and contribute to managing expectations.
Be proactive in reporting about the oil and gas sector and ensure objective coverage of the sector.
Seek the correct information from the right sources to avoid misrepresentations based on selfishinterests; Get the right mix between political debates and expert information; there is tendency to relymore on politicians than experts for media stories.
Network with key actors in the sector and obtain information with them to the extent that does not offendyour professionalism in order to deploy reporters optimally and for key tasks. Key actors include MEMD,
Finance, Parliament, Oil companies, NEMA, UWA, URA etc.
Find space and airtime in your channels for the sector, even when there are no "fireworks" around thesector to give people information. Oil stories make interesting reading/listening.
Work closely with the MEMD and PEPD Communications Office to ensure information flow.
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EXPECTATIONS FROM THE MEDIA
CONCLUDING REMARKS (1)
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CONCLUDING REMARKS (1)
58
The intensive promotional and exploration efforts to establish Ugandas petroleum potential were
successful as commercially exploitable reserves of oil and gas were confirmed in the country.
Investment in the sector was over US$1.3 billion at the end of 2011 and the resources discovered
in the country to date are now estimated to be about 3.5 billion barrels of oil in place.
Given the drilling success rate and cost of finding oil in the country so far the exploration effort has
been efficient.
Efforts are now being made to commercialize the discovered resources, initially through power
generation and subsequently through refining of the crude oil
Investment in the sector is expected to increase especially as preparation of the infrastructurerequired for production is put in place.
Employment opportunities for Ugandans in the oil and gas sector will increase as the country
progresses into field development and production
C l di R k
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Concluding Remarks (2)
59
The key challenges in the sector include the general publics anxiety andexpectation and the need to put in place an appropriate institutional and
regulatory framework for the sector.
These and other challenges in the sector are well identified and described in
the countrys oil and gas policy and therefore implementation of this policy
should go along way in addressing these challenges.
7/28/2019 An Overview of Uganda's Oil and Gas Sector
60/60
COMMISSIONERPetroleum Exploration and Production Department
Ministry of Energy and Mineral Development
Email: pepdebb@petroleum.go.ug
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