The Potential and developments in Uganda’s Upstream Petroleum Sector Presented By Ernest N. T. Rubondo Assistant Commissioner/Geology Petroleum Exploration and Production Department At The International Theatre, American Association of Petroleum Geologists (AAPG) Convention Calgary - Canada 19th – 22nd June, 2005

PRESENTATION OUTLINE Uganda’s Sedimentary Basins The Albertine Graben Developments in Petroleum Exploration in Uganda The Petroleum Potential of Uganda Conclusions

UGANDA’S SEDIMENTARY BASINS Two aeromagnetic surveys 1980 1994 Four sedimentary Basins Albertine Graben Hoima Basin L. Kyoga Basin Kadam-Moroto Basin Albertine Graben most prospective

THE ALBERTINE GRABEN Northernmost part of the Western arm of the East African Rift System

EAST AFRICAN RIFT SYSTEM THE ALBERTINE GRABEN 500Km long and averaging 45km wide Shared with the Democratic Republic of Congo 23,000sq km (Ugandan part) 1600km from the Indian Ocean Coast

STRUCTURAL SETTING Three structural domains: Northern trends in a NNE-SSW Central trends in a NE-SW Southern trends in a NNE-SSW Graben and half grabens separated by accommodation zones Extension direction: NW-SE Central Domain: Orthogonal extension Northern & Southern Domains Oblique extension.

PROGRESS OF PETROLEUM EXPLORATION IN UGANDA 1927-1945: Early Exploration Effort Reporting of Oil Seepages Drilling of Waki B1 well in 1937-Anglo European Investments Company of South Africa. Some shallow wells drilled in the Kibiro and Kibuku areas. 1945-1980: Stagnation Initially due to World War II Later due to political uncertainties 1980 to Date: Consistent and Modern Effort

PROGRESS OF PETROLEUM EXPLORATION CONT’D 1980 to Date 1980 Acquisition of Aeromagnetic Data over the entire Albertine Graben Indication of three main depocentres conducive for petroleum generation. 1985: Enactment of the Petroleum Exploration and Production Act 1991: Formation of PEPD 1992: Licensing of PETROFINA Left in 1993 without doing any work.

PROGRESS OF PETROLEUM EXPLORATION CONT’D 1993 PEPD ccommenced ground follow up surveys in the Areas identified by the aeromagnetic survey Resulted into the subdivision of the Graben into 5 Exploration Areas 1994 Aeromagnetic Survey carried out in the Eastern part of the country

STATUS OF LICENSING IN THE ALBERTINE GRABEN

SEISMIC DATA COVERAGE 1998: 190 line km

SEISMIC DATA COVERAGE 1998: 190 line km 2001: 210 line km

1998: 190 line km 2001: 210 line km 2003: 1600 line km SEISMIC DATA COVERAGE 1998: 190 line km 2001: 210 line km 2003: 1600 line km

1998: 190 line km 2001: 210 line km 2003: 1600 line km SEISMIC DATA COVERAGE 1998: 190 line km 2001: 210 line km 2003: 1600 line km 2004: 390 sq. km (3D) 2005: 216 line km

STATUS OF PETROLEUM EXPLORATION CONT’D Turaco prospect ranked No.1 3 wells drilled on the prospect - 2003 Turaco-1, TD 2487 - Identified hydrocarbons 2003 Turaco-2 TD 2963 - Identified additional petroleum bearing intervals 2004 Turaco-3 - Confirmed presence of natural gas and identified CO2 contamination at one level of the prospect.

INDICATORS OF UGANDA’S OIL AND GAS POTENIAL SOURCE ROCKS Rocks with good source potential found during geological mapping e.g. Kaiso Tonya Good source rocks also reported in the Waki Well Hundreds of metres of high quality lacustrine mature source rocks encountered in the wells drilled in the Albertine Graben. KAISO TONYA SHALE

INDICATORS OF UGANDA’S OIL AND GAS POTENIAL OIL SEEPAGES Distributed along the entire length of the Albertine Graben Kibiro Runga Paraa LAKE ALBERT Kibuku Kaiso Tonya Sonso

INDICATORS OF UGANDA’S OIL AND GAS POTENIAL OIL SEEPAGES Different geochemical characteristics indicating multiple sourcing

INDICATORS OF UGANDA’S OIL AND GAS POTENIAL RESERVOIR ROCKS Excellent reservoir quality sandstones identified during geological mapping Drilling has confirmed the presence of the high quality reservoir rocks in the subsurface Porosities of between 20-30%

POSSIBLE HYDROCARBON ACCUMULATIONS IN BASEMENT

SEDIMENT THICKNESS

INDICATORS OF UGANDA’S OIL AND GAS POTENTIAL TRAPS: Flower structures Rollover anticlines Tilted fault blocks Good potential for stratigraphic traps

INDICATORS OF UGANDA’S OIL AND GAS POTENTIAL ANALOGY Areas in the world with geological settings similar to the Albertine Graben Yishu Graben, China Sumatra Basin, Indonesia Phetchabun Basin, Thailand Cambay Basin, India Gulf of Suez Basin, Egypt

KAISO-TONYA COMPARED TO GRONINGEN AND BERYL FIELDS Large scale relay ramp:-Kaiso-Tonya Large scale relay ramp:-Groningen gas field, Netherlands (after Peacock et al 1994) Large scale relay ramp:-Beryl Oil field, south Viking Graben (after Peacock et al 1994)

THE STRUCTURE OF THE ALBERTINE GRABEN COMPARED TO THE GULF OF SUEZ RIFT FAULTS AND TRANSFER ZONES After McClay 1997

BIOGENIC GAS: AN ADDITIONAL PLAY PRELIMINARY ANALYSES INDICATE POSSIBILITY OF SHALLOW BIOGENIC GAS IN THE ALBERTINE GRABEN RAPID SEDIMENTATION IN THE RIFT CONDUCIVE TO BIOGENIC GAS FORMATION REDUCTION OF CO2 COULD PLAY AN IMPORTANT ROLE IN THE FORMATION OF BIOGENIC GAS BIOGENIC GAS IS AN IMPORTANT RESOURCE IN CANADA, USA, INDONESIA AND RUSSIA AN ADDITIONAL PETROLEUM PLAY IN THE ALBERTINE GRABEN

LICENSING REGIME (LEGAL) PETROLEUM EXPLORATION AND PRODUCTION ACT PRODUCTION SHARING AGREEMENTS EXPLORATION: MAXIMUM 8 YEARS PRODUCTION: 20 YEARS RENEWABLE

LICENSING REGIME (FISCAL OBJECTIVE IS TO ENCOURAGE INVESTMENT AND ENSURE EQUITABLE BENEFIT TO BOTH GOVERNMENT AND LICENSEE ROYALTY COST OIL PROFIT OIL CORPORATE TAX

POTENTIAL MARKETS FOR UGANDA’S OIL AND GAS LOCAL/REGIONAL CONSUMPTION Uganda consumed over 600,000 m3 of petroleum products during 2003 (equivalent to approximately US$ 165 million). This is increasing at the rate of 3-5% per annum East Africa (Kenya, Uganda, Tanzania) now spend in excess of US$ 2 billion annually. Regional demand including Rwanda, Burundi, Eastern DRC increasing Demand can support a medium sized refinery.

POTENTIAL MARKETS FOR UGANDA’S OIL AND GAS Generation of electricity considered an option Gas is a very clean source of electricity Conducive to stepping up generation capacity based on demand Current power deficit in Uganda > 100MW. Additional regional demand >1000MW and growing. Other uses of Gas Production of ammonia urea for use as fertilizers

CONCLUSION CONFIRMATION OF THE PRESENCE OF A PETROLEUM SYSTEM TOGETHER WITH ANALOGY WITH BASINS SIMILAR TO THE ALBERTINE GRABEN INDICATE A STRONG POSSIBILITY OF FINDING LARGE VOLUMES OF OIL AND GAS IN UGANDA THE MARKETS FOR ANY PETROLEUM PRODUCED IN THE COUNTRY ARE CLEAR THREE OIL COMPANIES ARE CURRENLTY MAKING LARGE INVESTMENTS INVESTIGATING THESE OPPORTUNITIES ONE OUT OF THE FIVE EXPLORATION AREAS IN THE ALBERTINE GRABEN ARE YET TO BE LICENSED

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