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THE OPPORTUNITIES FOR PETROLEUM EXPLORATION IN UGANDA

THE OPPORTUNITIES FOR PETROLEUM EXPLORATION IN UGANDA. By Reuben J. Kashambuzi and Ernest N.T. Rubondo Presented at the Annual Convention of the American Association of Petroleum Geologists (AAPG) Salt Lake City, Utah. May 2003. PRESENTATION. 1. Background

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THE OPPORTUNITIES FOR PETROLEUM EXPLORATION IN UGANDA

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  1. THE OPPORTUNITIES FOR PETROLEUM EXPLORATION IN UGANDA By Reuben J. Kashambuzi and Ernest N.T. Rubondo Presented at the Annual Convention of the American Association of Petroleum Geologists (AAPG) Salt Lake City, Utah May 2003

  2. PRESENTATION 1. Background 2. Geological Setting and the East African Rift System 3. The Petroleum Potential of the Albertine Graben 4. Licencing Regime 5. The Opportunities 6. Conclusion

  3. LOCATION AND FACTS ABOUT UGANDA UGANDA Location: Latitude: 04° 12’ N & 01° 29’ S Longitude: 29° 34’ E & 35° 00’ W Uganda is a Republic Total Area: 241,038 sq. Km Population: 24.7 million (2002) Capital City: Kampala Literacy rate: 63% Religions: Roman Catholic, Protestant, Muslim, Indigenous beliefs Altitude: Minimum: 620 meters Maximum: 5,110 meters UGANDA Climate: Temp Range 15-30°C Mean Temp. 220C Annual rainfall 720 - 2,000mm Per Capita GDP (2002): US$ 230 Total Exports(2001): US $ 452 m Total Imports(2000): US $1.54 bn Imports of Petroleum Products:Approx US $ 160m Source: Uganda Bureau of Statistics & Uganda Investment Authority

  4. Tectonic Map of Africa

  5. EAST AFRICAN RIFT SYSTEM (EARS) L. Albert • Bifurcates near the Tanganyika shield into the Eastern and Western Branch • Showing HC occurrences • High TOC lacustrine shales in the Turkana area, the Albertine Graben and the Lake Tanganyika Area. Adopted from Morley, 1999

  6. East African Rift System and Albertine Graben Kampala Mombasa Dar-Es-Salaam AlbertineGraben • ALBERTINE GRABEN • 1.1 A Tertiary rift basin approx. 23,000 sq.km each in Uganda and D.R.C. • 1.2 About 1,600km from Mombasa and accessible by road, railway and air. • 1.3 Hotels (some 3 star) and lodges available. • 1.4 Tourist areas: • Semliki Wildlife Reserve; • Ajai Wildlife Reserve; • Obongi Wildelife Reserve • Queen Elizabeth National Park; • Murchison Falls National Park; • Rwenzori National Park; • Semliki National Park and 1.5 It consists of five (5) Exploration Areas at different stages of exploration. 1.6 Numerous oil seeps present

  7. GEOLOGICAL SETTING. 3.1: The Albertine Graben is the northermost segment of East Afr Rift System. 3.2: Bounded by high angle dip-slip and oblique-slip fault systems forming an asymetrical basin that deepens on the D.R.C. side. 3.3: Fault plane dip 60-80Deg. 3.4: Depths to pre-rift basement are estimated to reach 6000m. 3.5: Structural style characterized by extensional rifting but seismic suggests compression in lower parts of the basin. 3.6: Basin development dates to Miocene. 3.7: Normal faults are en echelon and linked by oblique transfer faults. 3.8: Boundary fault throws vary from 300-1500m and may exceed 3000m. 3.9: There’s noticeable volcanic activity in Lake Edward-George basin, but absent in other parts of the Graben. Sebugoro Formation 100-120m of Sandstone, siltstone, diatomic, shale, fossiliferous and calcitic ironstone. Kaiso-Tonya Shale Kisegi Formation 150-200m of Sandstone

  8. GEOLOGICAL SETTING. • 3.10: Aeromagenetic survey of 1983/84 and subsequent ground gravity and magnetic follow up indicate that the Albertine Graben is divided into a number of sub-basins with depocentres in L. Edward, Semliki, Lake Albert, Pakwach and Rhino Camp areas which exceed 6000m in places; 3.11:Geological history of the Graben characterised by the pre-rift and syn-rift phases; 3.12: Pre-rift phase begins the Precambrian that consists of gneisses and varying amounts of quartzites and granites; 3.13:Unmetamorphosed pre-rift clastics include tillites, variegated mudstones, sandstones and conglomerates. They are thought to range in age from Permian to Jurassic; 3.14: Syn-rift rocks comprise Miocene to Quarternary sediments. Their environment of deposition was fluvio-lacustrine; 3.15:Waki B-1 well indicates a basal section consisting of conglomerates, sandstones and shales postulated to be Jurassic by analogy to a similar section in the central D.R.C. EA1 EA2 EA3

  9. Progress of Exploration in Uganda • 1983/84 • Aero-magnetic: • -Identified 3 basins: EA1, EA2 & EA3. • 1991-Todate • Geological mapping: • -Source rocks, Reservoir rocks and possible seals identified and surface structures mapped. • Ground Gravity and Magnetics: -EA’s 1-4 covered, EA5 in progress -Identified 5 basins with modeled sediment thickness 3 -5.5 Km. • Seismic: • -Identified complex geological structuring and confirmed the above sediment thickness in EA3. • -2D Seismic acquisition in EA2 expected before end of 2003. • Exploratory Drilling: - 2002 - Additional drilling expected during 2003 1991-Todate 1983/84 EA1 EA2 EA3

  10. HYDROCARBON POTENTIAL OF THE ALBERTINE GRABEN • BASIN GEOMETRY • A number of buried “valleys” and “hills” observed along E-E’. • Valleys represent possible kitchen areas. • “Hills” represent possible traps. E’ E

  11. HYDROCARBON POTENTIAL OF THE ALBERTINE GRABEN SEISMIC DATA • Depocentres - Sediment thickness in excess of 5 km • Trap types - Rollover anticlines, Tilted Fault Blocks, and other types.

  12. HYDROCARBON POTENTIAL OF THE ALBERTINE GRABEN • RESERVOIR ROCKS • High quality sandstones in outcrop also in Waki B-1 and Turaco-1 wells • Porosity 20-30% • Alternating shales and sandstones in Waki B-1 well suggest potential for good sealing mechanism, and posibility of multiple pay zones. • Similar arrangment observed in outcrop of the Semliki basin.

  13. HYDROCARBON POTENTIAL OF THE ALBERTINEGRABEN • The Albertine graben is rich in reservoir rocks. • Porosity in sandstone ~30% • Secondary porosity in fractured basement

  14. HYDROCARBON POTENTIAL OF THE ALBERTINE GRABEN SOURCE ROCKS AND OIL SEEPAGES • 1. Source Rocks • Mapped inthe Kaiso_Tonya area • Encountered in both Waki B-1 and Turaco-1 wells • 2. Oil Seeps • There are five proven oils seeps in the Albertine graben • Paara, Kibiro, Kibuku, Sempaya • Others reported on the DRC side of the Graben • Oil shows encountered in wells. An oil film on VictoriaNile

  15. HYDROCARBON POTENTIAL OF THE ALBERTINE GRABEN • Traps • Typical rift traping mechanisms to be expected • Drape-anticline; • Rollover-anticline; • Fault-block; • Buried-hill; • Pinch-out; • Lithologic • Faulting major control of trap formation. SHEMATIC DIAGRAM SHOWING DIFFERENT TYPES OF TRAPS

  16. TRAP TYPES IN SEMLIKI BASIN, ALBERTINE GRABEN Gravity SE NW Depth profile 1:50,000 • Gravity highs • Tilted Fault Blocks • Drape anticline • Rollover anticline

  17. The Prospectivity of the Albertine Graben DHI’s Direct Hydrocarbon Indicators (DHI): Flat Reflections, Bright spots.

  18. AVAILABLE MAKERT • Uganda’s Petroleum Products Consumption • US $ 160.0m annually • 40% of export earnings • 12% of GDP • 5% increment per year • Regional market • Uganda, Kenya, Tanzania estimated to consume over US $ 1.0 bn annually. • None produces oil. • Rwanda and Burundi import all their petroleum products requirements • Eastern D.R.C. depends on imports through Uganda. • DISCOVERY IN THE ALBERTINE GRABEN WILL FIND A LARGE AND READY MARKET

  19. ANALOGY Rift Environments are well established world wide as good habitats for oil and gas accumulation e.g Viking Graben in the North Sea Albertine Graben is Analogous to Yishu Graben in China, Central Sumatra Basin in Indonesia , Cambay Basin in India.

  20. YI-SHU GRABEN IN CHINA Lower Tertiary, Lacustrine source rock, Sst reservoirs and basement drape anticlines, faulted blocks, buried hills, 2200 km2, 876.54 million bbls and 31.8 billion m3 gas.

  21. CENTRAL SUMATRA BASIN Central Sumatra Basin • Lower Tertiary • Lacustrine source rock, Type I&II kerogen • Delta front sandstones and fractured basement • Palaeo highs, drag folds • >90,000 km2 • 25 billion bbls (Adopted from Lambiase, 1995)

  22. COMPARISION OF YI-SHU, ALBERTINE AND CENTRAL SUMATRA

  23. COMPARISION OF YI-SHU, ALBERTINE AND CENTRAL SUMATRA

  24. LICENCING REGIME • Petroleum Exploration in Uganda is governed by: • The Petroleum (Exploration & Production ) Act, 1985; • The Model Production Sharing Agreement • Uganda Wildlife Statute, 1996 • The National Environment Statute, 1995 • Exploration Periods Exploration License not exceeding 8 years subdivided as follows: • Exploration Period Maximum • First 4 years • Second 2 years • Third 2 years Production license 25 years with a possibility of renewal for 5 years • Work Programme • Seismic commitment • An early well commitment • Mandatory Relinquishment • 50% after the First Period. • 25% after the Second period

  25. FISCAL TERMS • Sliding Royalty on production to allow for producing small fields • Sliding profit sharing • Attractive cost recovery • Income Tax currently fixed at 30% • Government will consider alternative proposals during negotiations.

  26. Some Key Incentives to Investors The graben has all the necessary elements of a valid petroleum system; The Exploration Areas are sizeable; The whole Region imports its petroleum products; There is already established market for petroleum products; Agreement on Co-operation with Democratic Republic of Congo already in place; The Department of Petroleum Exploration and Production provides well organized data and guidance; The investment law is in place which is being handled by Uganda Investment Authority; No signature bonus; No restriction on repatriation of profits; Stable taxation regime to avoid encumbrances that would arise from tax fluctuations; Membership of Uganda to Multilateral Investment Guarantee Agency that ensures security of investment

  27. OPPORTUNITIES FOR LICENSING • EA5 Rhino Camp Basin • Area Size 6,040 sq. Km • Estimated sediment thickness 3 Km from aeromagnetic data. • EA2 Lake Albert Basin • Area size 4,675 sq Km • Modeled sediment thickness 5.5 km • Licensed to Hardman Resources Ltd. and Energy Africa Ltd. • EA1 Pakwach Basin • Area Size 4,285 sq Km • Estimated sediment thickness 5 Km • EA4 Lake Edward-George basin • Area Size 5,910 sq Km • Sediment thickness 5.5 Km • EA3 Semliki Basin • Area size 4,630 sq Km • Estimated sediment thickness 6 Km • Licensed to Heritage Oil & Gas Ltd. and Energy Africa Ltd

  28. CONCLUSION The Petroleum potential of the Albertine Graben has been demonstrated but remains under explored. There is acreage in 3 Exploration Areas which is available for licensing Uganda has a conducive investment policy, liberalized economy and very clear petroleum legislation You are welcome to invest in the petroleum potential of Uganda, enjoy the scenery and friendliness of its people.

  29. Other Investment Opportunities • Floriculture • Fish and Fish farming • Cotton and Textile • Building and Construction • Foods and Beverages • Education • Financial Services • Fruits and Vegetables • Dairy • Tourism • Petroleum Exploration • Mining • Commercial Agriculture • Agro-processing

  30. Thank you and We also Welcome you to Booth no. 8914 for further discussions. Hope to see you in Uganda soon. For further Information, Please Contact: The Commissioner Petroleum Exploration and Production Department P. O. Box 9, Entebbe, UGANDA Tel.: 256-41-320714/77-720714 Fax.: 256-41-320437 Email: pepdebb@africaonline.co.ug

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