REGULATION OF UGANDA S OIL AND GAS SECTOR AND INVESTMENT OPPORTUNITIES

Transcription

1 REGULATION OF UGANDA S OIL AND GAS SECTOR AND INVESTMENT OPPORTUNITIES Ali Ssekatawa, Director for Legal and Corporate Affairs Petroleum Authority of Uganda 23rd May 2017

2 PRESENTATION OUTLINE 1. Introduction 2. Regulatory and Institutional Framework 3. Status of Licensing 4. Regulatory Processes 5. Investment Opportunities 6. Conclusion The Petroleum Authority of Uganda 2

3 REFINERY DEVELOPMENT INTRODUCTION The Petroleum Authority of Uganda 3

4 COUNTRY OVERVIEW - UGANDA Location: On the Equator, Bordering Kenya, South Sudan, DRC, Rwanda & Tanzania Area: 242,000 km 2 GDP (2014): US$27.0 Billion Population (2015): million GDP Per Capita (2014): US$ GDP Growth Rate (2014): 4.8% Distance from Coast: 1,250km from Mombasa Government: Republic and Constitutional Democracy with regular elections The land linked position, gives the country a strategic advantage to be a regional hub for trade and investment Data source : The World Bank The Petroleum Authority of Uganda 4

5 Number of Wells INTRODUCTION Exploratory and Appraisal Drilling DRILLING SUCCESS TREND IN THE ALBERTINE GRABEN Discovery Dry hole Success 12% Failure 88% st Commercial Discovery YEAR Drilling trend in the Albertine Graben (Source : PEDPD) 121 exploration and appraisal wells drilled in the Albertine Graben to date 39 exploration wells and 82 appraisal wells 106 wells encountered hydrocarbons 21 oil and gas discoveries made and drilling success rate of over 88% 36 wells have been flow tested Crude blend between API with very low sulphur of 0.16wt/%. Paraffinic and waxy The Petroleum Authority of Uganda 5

6 RESOURCES (MMBBL) Cummulative number of wells INTRODUCTION Reserves and Resources CRUDE OIL 8, Billion Barrels of Stock Tank Oil Initially In Place (STOIIP) 1.4 Billion barrels of recoverable reserves 7,000 6,000 5,000 4, ,000 NATURAL GAS 2, BCF of non-associated Gas Initially In Place (GIIP) 173 BCF of associated gas 1, Cumm expl wells Cumm appraisal wells Mid STOIIP Recoverable Mid 20 0 Statistical increase in Uganda s resources (Source: PEDPD) The Petroleum Authority of Uganda 6

7 INTRODUCTION Investment by industry in seismic surveys, exploratory and appraisal drilling reached a total of US$3 billion by the end of 2016 IOC s spend on contracts with local service providers growing, 12% in 2012 and 36% in2015 Sharp increase in investment after first commercial discovery This investment has been important in progressing the country s oil and gas sector 1st Commercial Discovery Expected to increase significantly during field development and production including development of a refinery and attendant pipelines The Petroleum Authority of Uganda 7

8 REGULATORY AND INSTITUTIONAL FRAMEWORK The Petroleum Authority of Uganda 8

9 REGULATORY AND INSTITUTIONAL FRAMEWORK Regulatory Framework POLICY The National Oil and Gas Policy (2008) NATIONAL OIL AND GAS POLICY PETROLEUM LEGISLATIONS PETROLEUM REGULATIONS PSA LAWS The Petroleum (Exploration, Development and Production) Act, 2013 Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013 Public Finance Management Act 2015 that handles petroleum revenue management Available on: REGULATIONS The Petroleum (Exploration, Development and Production) Regulations 2015 The Petroleum (Exploration, Development and Production) (Health, Safety and Environment) Regulations 2016 The Petroleum (Exploration, Development and Production) (National Content) Regulations 2016 The Petroleum (Exploration, Development and Production) (Metering) Regulations 2016 The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Regulations The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations, The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (Health, Safety and Environment) Regulations, The Petroleum Authority of Uganda 9

10 REGULATORY AND INSTITUTIONAL FRAMEWORK Institutional Framework DIRECTORATE OF PETROLEUM (In Ministry of Energy and Mineral Development) To support in Policy formulation and licensing of acreage Upstream, Midstream and Downstream depts. PETROLEUM AUTHORITY OF UGANDA To regulate and monitor compliance of petroleum operations UGANDA NATIONAL OIL COMPANY LTD To move forward the country s commercial interest in PSAs Create Joint Ventures across the petroleum value chain The Petroleum Authority of Uganda 10

11 REGULATORY AND INSTITUTIONAL FRAMEWORK Uganda s Legal and Institutional Framework Provides a stable, enabling and predictable investment climate Entire project life well covered - from exploration to decommissioning Covers the whole value chain upstream, midstream and downstream Clear and robust regulation environment Clear institutional setup with well defined roles Well spelt out regulatory requirements Promotes transparency Clearly spells out government policy for the industry Investor rights are entrenched in the legislations Absolute rights over licensed acreage Rights over discovered resources Respects sanctity of contracts The Petroleum Authority of Uganda 11

12 STATUS OF LICENSING Trends of companies licensed in the country Changed from small independent companies to large International oil companies after first commercial discovery Currently running 4 PSAs with Three companies; CNOOC, Total and Tullow. Reduced exploration risk 12 The Petroleum Authority of Uganda

13 STATUS OF LICENSING Licences and Acreages Total E&P Uganda B.V Production Licenses issued in August 2016 for Jobi- Rii, Ngiri & Gunya oil fields Application for Production license submitted for Jobi- East & Mpyo discoveries Lyec Discovery under appraisal in EA1A Tullow Uganda Operations Pty Limited Production License issued in August 2016 for the Kigogole-Ngara, Nsoga, Ngege, Kasamene-Wahirindi, Mputa-Nzizi & Waraga oil/gas fields 30 20'0"E Legend Town International Boundary Kingfisher Development Area Production Licence Boundary Oil Field Gas Discovery District Boundary Blocks of 1st Licencing Round Under Negotiations With GOU Discoveries Under Appraisal 30 40'0"E 31 0'0"E 31 20'0"E 31 40'0"E Amuru Kango Okollo Arua War Agermach Lolim Zeu Zombo Zombo Nebbi Pacego PakwachNwoya NyaravurNebbi Paidha Goli Parombo Angaba Panyimur Dei Buliisa Buliisa D.R. CONGO L.Albert Biso Masindi Masindi Kigorobya NGASSA Kitoba 2 40'0"N 2 20'0"N 2 0'0"N 1 40'0"N CNOOC Uganda Limited Production License issued in February 2012 for the Kingfisher Field Undertaking pre-development activities Buhuka Hoima Munteme Hoima Kalangala Kitoma Central Kyankwanzi 1 20'0"N Exploration Licensing PSA negotiations ongoing for Ngassa and Kanywataba areas in the First Licensing round Ntoroko TURACO KANYWATABA The Petroleum Authority of Uganda 30 20'0"E 30 40'0"E 31 0'0"E 31 20'0"E 31 40'0"E 13 Bundibugyo Kabarole Fort Portal Butiti Kyenjojo Kagadi Muhororo Kibaale Kyegegwa Kibaale Kyegegwa UGANDA Kitoma West Kakumiro Nkoko Ntwetwe Kiboga Mubende Madudu Kilometers 1 0'0"N 0 40'0"N

14 REGULATORY PROCESSES REGULATORY PROCESSES The Petroleum Authority of Uganda 14

15 REGULATORY PROCESSES Technical Consultations Work Program and Budget Approval License managers coordinate activities Manpower requirements /Nationalisation Plans Support Infrastructure Development Competitive Procurement processes National Participation The Petroleum Authority of Uganda Joint Stakeholder Engagements

16 REGULATORY PROCESSES Local Content Development The key areas of focus are:- Capacity building; Transfer of knowledge and technology; Use of locally produced goods and services; Enterprise development; and Employment of Ugandan citizens. PAU is developing a National Suppliers Database and a National Talent/ Skills Register The Petroleum Authority of Uganda

17 REGULATORY PROCESSES National Suppliers Database Tool for regulating the procurement of goods and services in the petroleum subsector. Design of the NSD completed and registration of the potential suppliers for Uganda s oil and gas sector is ongoing. Requirement for all suppliers to register Reduce the costs associated with contracting and, provide a standardized approval process in line with the laws and regulations.. The Petroleum Authority of Uganda

18 INVESTMENT AND OTHER OPPORTUNITIES INVESTMENT AND OTHER OPPORTUNITIES The Petroleum Authority of Uganda 18

19 INVESTMENT OPPORTUNITIES Summary of Investment Opportunities UPSTREAM First Licensing Round and Farm-in Opportunities MIDSTREAM Oil refinery SUPPORT INFRASTRUCTURE Terminal development Speculative Surveys Crude Export and Refined products pipelines Airport development Exploration and Field Development Services Gas-to-Power Plants Roads and Railway lines The Petroleum Authority of Uganda 19

20 INVESTMENT OPPORTUNITIES Road to First Oil ~ Us $ 20 Billion Upstream Devt Uganda Refinery Project East Africa Crude Oil Pipeline Support Infrastructure CPFs, Flowlines & Feeder Pipelines 60,000 bpd ~200,000 bpd Kabaale Airport FEED, ESIA & other studies ongoing Lead Investor 2017 GoU, GoT, Upstream Licensees Industrial Park Master Plan New Exploration 211km products pipeline to Buloba FEED Launched Critical Oil Roads, Bridges, Railway ~US$ 10billion ~US$ 4 billion ~$ 3.55 billion ~US $ 2 Billion Projects provide an opportunity for National Content Development The Petroleum Authority of Uganda 20

21 CONCLUDING REMARKS Successful and efficient exploration for oil and gas in Uganda resulting in 21 discoveries, 6.5Billion barrels of Oil In Place and 1.4 to 1.7 Billion barrels of recoverable reserves at an investment of less than US$ 4 Billion. In the medium term, investment in the country s oil and gas sector are estimated at US$ 20 billion with $10 billion in field development and new exploration while another $10 billion will be in petroleum infrastructure development. Robust, modern and effective regulation and institutional framework together with the required physical and fiscal security and support systems is in place. Uganda s regulatory environment offers a transparent, predictable and enabling environment for investment in the oil and gas sector. Government agencies work closely with the private sector The Petroleum Authority of Uganda 21

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