CAPETOWN – Uganda is richly endowed with renewable energy resources for energy production and the provision of energy services with a total estimated potential of about 5,300 MW.
According to the minister of energy and mineral development Ms Irene Muloni 90% of Uganda’s energy mix is from renewable sources.
“There is vast potential for renewable energy sources from the various water bodies in the country,” she noted.
Uganda National Renewable Energy and Energy Efficiency Alliance (UNREEEA) an energy umbrella organisation says Uganda has 450 MW of geothermal, 1,650 MW of biomass cogeneration, 460 million tons of biomass standing stock with a sustainable annual yield of 50 million tons, an average of 5.1 kWh/m2 of solar energy, and about 250 Million tons of peat (800 MW).The overall renewable energy power generation potential is estimated to be 5,300 MW.
Ms Muloni was 8 November addressing the Ministerial Panel at the 26th Africa Oil Week (AOW) 2019 in Cape Town, where energy Ministers from Africa; Uganda, Ghana, Mali, Cote d’Ivoire, the Democratic Republic of Congo and Rwanda discussed national hydrocarbon strategies.
She explained that Uganda’s strategy is to optimize the investment benefits from the petroleum sector in order to develop durable sustainable infrastructure and acquire technology that will facilitate investment in renewable sources of energy among others.
“Uganda is open for business,” Ms Muloni said.
The Africa Oil Week brings together a wide network of global oil and gas operators, contractors and Governments in Africa. Twenty-five (25) ministers and close to 1500 delegates from over two hundred and fifty (250) countries were in attendance.
Uganda’s Second Licensing Round
Ms Muloni used the occasion to invite companies to bid for the five (5) highly prospective blocks; Avivi, Omuka, Kasurubani, Turaco and Ngaji in the ongoing second licensing round which was announced in May, 2019.
“The entire Albertine basin is de-risked, some of these five blocks neighbor the other development projects (Tilenga and Kingfisher), and the support infrastructure, making them highly lucrative and all of the five blocks have good quality seismic and other data,” Ms Muloni said.
Uganda is looking to increase the country’s resources with, 90% of the Albertine basin currently unlicensed and preliminary exploration work in other basins is also ongoing, and an oil seep has been encountered by the Ministry’s technical teams in the Moroto Kadam basin, providing evidence of a working petroleum system.
The Road to First Oil: Development of the Discoveries
The Government and the International Oil Companies (IOCs) are striving to fast track the processes to first oil.
“Tullow’s planned farm down to raise funds to reinvest in the sector is appreciated. Government has intervened to resolve the standoff, in order to fast track the achievement of the Final Investment Decision by the end of the first quarter of 2020,” Ms Muloni said.
She revealed that Uganda together with joint venture partners are working to ensure that the development and production stage of discovered commercial is expedited and that the key milestones on the road to first oil have been achieved which include; the establishment of institutional framework, legislation and the conclusion of key the Front End and Engineering Designs (FEED) and the Environment and Social Assessment (ESIA studies).
Mr Gilbert Kamuntu, the Chief Commercial Officer UNOC noted that Uganda’s strategy for attracting funding for the oil projects is focused on project financing.
“UNOC on behalf of the Government of Uganda is a shareholder in the Upstream developments and, both the refinery (40%) and the East African Crude Oil Pipeline (15%) projects that have a capital requirement of US$ 3.5 billion each,” Mr Kamuntu said during a panel discussion on raising finance for nationally transformative projects.
Local Content Development
Ms Peninah Aheebwa, the Director Technical Support Services at Petroleum Authority of Uganda (PAU) said the government of Uganda in partnership with the private sector has undertaken capacity building initiatives and enterprise enhancements to ensure optimal participation by Ugandans.
“The laws are a deliberate effort to build the capacity of the private sector along the entire petroleum value chain and provision of local content is part of the policies and laws governing the sector. Sixteen opportunities have been ring fenced for Ugandan enterprises,” said Ms Aheebwa.
Ms Aheebwa highlighted what the country wants to achieve in terms of local content in the oil and gas sector.
“The government has clearly defined what the value created within the country should be and the the key pillars are; the employment of Ugandans, the use of goods and services locally made or manufactured in Uganda, transfer of knowledge and technology, research and development, and enterprise development,” Ms Aheebwa added.
She revealed that initiatives like in-country accreditation and certification of Ugandans is ongoing. 700 technicians have so far been trained and certified internationally and 200 government staff have been trained in different technical skills to effectively handle the oil and gas sector.
Ms Aheebwa explained that together with the private sector, enterprise development is ongoing to enhance the capacity of SMEs to take part in the petroleum value chain.
Mr Ernest Rubondo, the Executive Director of the PAU said that Uganda has realistic local content goals, based on various studies undertaken by the Government and the industry to better understand the capacity within the country.
Legislative and Institutional Reforms
“The oil and gas sector in Uganda is being managed in line with industry best regulatory practice, which provides for separation of the licensing, regulatory and commercial roles between the Ministry, PAU and the Uganda National Oil Company (UNOC), respectively”, Mr Rubondo added.
Mr Steven Winberg, the Assistant Secretary, United States Department of Energy said African countries such as Uganda have undertaken institutional and Legislative reforms in order to create a favorable investment climate.
“Uganda has set up an independent regulatory body, the Petroleum Authority of Uganda. Our Government is supporting the US led consortium, the Albertine Graben Refinery Consortium, that plans to construct the largest refinery within the East African Region.,” Mr Winberg said during his keynote address at AOW.
Records at the ministry of energy and mineral development indicate that Uganda has so far made twenty-one (21) discoveries, with 88% drilling rate, and six (6) Billion (Bn) barrels of which 1.4Bn barrels are recoverable.
The records further reveal that Nine (9) production licenses have been issued to Total E&P, CNOOC Uganda Limited and Tullow Uganda and that three exploration licenses have been issued to Oranto Petroleum Limited and Armor Energy.