Uganda Oil Biggest in Africa
With huge resources of oil being discovered in Uganda, it should not be too difficult to fathom the true reason for US aid pouring in to help fight terrorists in a war in that African nation.
eritage Oil announced details of a large oil discovery in Uganda, which the company claimed could be the largest onshore discovery in sub-Saharan Africa. Heritage said that its latest discovery – Giraffe1 – in the Lake Albert region, could total at least 400 million barrels of oil.
However, Paul Atherton, chief financial officer, said that the wider field it was developing, dubbed Buffalo-Giraffe, had several “billions of barrels of oil in place”, although it was unclear how much of this would be recoverable.
He said that the field, which is 9,000 square kilometers in size – or six times the size of Greater London – was unquestionably the largest onshore discovery made in sub-Saharan Africa in at least 20 years, possibly ever.
Mr. Atherton said that of the eighteen wells the company had drilled in the basin so far, all had produced oil. “Clearly the entire basin is full of oil,” he said. “It’s a world-class discovery, the most exciting new basin in Africa in decades.”
Previously, the largest onshore fields discovered in sub-Saharan Africa were at Rabi-Kounga in Gabon, where 900 million barrels were found in 1985, and at Kome in Chad, where 485 million barrels were found in 1977.
Mr. Atherton said that it would take at least another three years to start commercial production. The crude could be exported by road or rail, he said, but analysts believe that the most practical solution would be to build an 806-mile pipeline to take it to Kampala, Uganda’s capital, and then the Kenyan coast. The pipeline would need to be heated and designed to traverse swampy and mountainous land. It would cost an estimated $1.5 billion to complete. Heritage and its partner Tullow Oil, which also has a 50% equity stake in the project, would need to demonstrate that the field could produce at least 400 million barrels of oil to justify the cost of building such a pipeline. Richard Griffith, an Evolution Securities analyst, said the latest discovery “thrashed” this commerciality threshold.
Uganda to start refining its own oil in 2014
Uganda expects to start refining crude oil from its fields in 2014 and the proceeds will help end the economy’s dependence on donor aid, its president said.
The east African nation discovered commercial oil deposits in 2006 in the Albertine basin along its border with the Democratic Republic of Congo and reserves of about 2.5 billion barrels have been confirmed.
“The first oil to be refined will be in the year 2014,” President Yoweri Museveni told a ruling party retreat in the eastern town of Jinja.
Officials had to commission a feasibility study for the refinery to convince firms involved in the sector that the project was viable.
“We should resist ferociously those parasites who want to give away this resource for ‘a morsel’ of food as did Esau in the Bible,” Museveni said.
Firms involved in the nascent oil sector include London-listed Tullow Oil, Heritage Oil, French oil company Total and Chinese oil group CNOOC.
Uganda’s parliament passed a resolution urging government to withhold consent to Tullow Oil’s proposed partnership with Total and CNOOC.
That deal, in which Tullow is selling stakes in its Ugandan exploration properties to the two companies for $2.9 billion, is expected to unlock a $10 billion investment that will see the country’s oil sector advance into production phase.
The country’s ministry of energy estimates the basin’s crude reserves could climb to six billion barrels when fully explored.
Only 40% of the basin has so far been studied.
The refinery’s capacity is expected to be ramped up gradually thereafter to meet regional and international demand, with output peaking at about 200,000 barrels per day. When fully developed, the refinery is expected to cost $2 billion.
President Museveni has insisted on developing a domestic refinery and guaranteeing higher earnings to avoid the pitfalls that have bedeviled other sub-Saharan African oil producers.
“Since we discovered the oil and gas, the agents of foreign interests have been running up and down urging us to produce the oil as quickly as possible,” Museveni said.
Obama Sends Troops to Fight Ugandan Rebels
Meanwhile, U.S. President, Barack Obama, has authorized the deployment of around 100 U.S. special operations troops to Uganda to fight the rebel group known as the Lord’s Resistance Army (LRA).
In a letter to Congress a couple of years ago, Obama had informed that, in the next months, further U.S. troops will be shipped out to other African countries as well, including South Sudan, the Central African Republic and the Democratic Republic of Congo.
However, the President noted that although the deployed U.S. forces are combat-equipped, “they will only be providing information, advice and assistance to partner nation forces, and they will not themselves engage LRA forces unless necessary for self-defense.”
In May 2010, President Obama signed into law the LRA Disarmament and Northern Uganda Recovery Act which reaffirmed the U.S. commitment to support regional partners’ efforts to end the (so-called) ‘atrocities’ committed by LRA in central Africa.
The United States’ decision to send a group of military advisers to assist the forces that are countering the LRA, the U.S. State Department said, is part of the comprehensive, multi-year strategy that seeks to help mitigate and end the threat posed to civilians and regional stability by the LRA