science of oil - from formation to extraction
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"SCIENCEOFOIL:FROM"SCIENCEOFOIL:FROMFORMATIONTOEXTRACTION"FORMATIONTOEXTRACTION"
ByBy
LYOIDAH KICONCOLYOIDAH KICONCOGEOLOGISTGEOLOGIST
to
AfricanCentreforMediaExcellence(ACME)
10TH APRIL2012
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PRESENTATIONOUTLINE1. Definitions
.
3. PetroleumSystemElements
. epe ro eum
a ue
a n
5. InstitutionalandRegulatoryFramework
6. Expectations romt eMe ia
7. Challenges
8. Conclusions
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PETROLEUM
Thisisah drocarbon H&C , enerated
bynaturalmechanismsandmanifestsinformofSolid li uidor asto ieldfuels.
9
April,
2012
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PETROLEUMGEOLOGY
formationinthesubsurface
necessitiesforitsformation,migration,entrapment
.
9
April,
2012
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SEDIMENTARYBASINSiteswherepetroleumisformedbychemicalreactions
fromsedimentarybiogenicprecursormaterial,whereitis
redistributedbymigrationviapermeablepathways,and
whereit
is
dumped
and
stored
in
the
reservoir
rocks
or
dissipatedanddestroyedbychemicalreactions
Anygeographicalfeatureexhibitingsubsidenceand
.
buried,theyaresubjectedtoincreasingpressureandbegin
9
April,
2012
.
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OIL AND NATURAL GAS FORMATIONOIL AND NATURAL GAS FORMATION
Crude oil-oily flammable liquid consisting a variety of chemicalcompounds that are produced in sedimentary rocks of organic matter.
Natural gas is a hydrocarbon consisting of mainly methane that is
produced in sediments and sedimentary rocks during burial of organic
matter
Petro eum
cru eo
an
natura
gas
are
oun
ncerta n
layersofrockthatareusuallyburieddeepbeneaththesurfaceof
theearth.Inorderforarocklayertoqualifyasagoodsourceof
hydrocarbons,itmustmeetseveralcriteria.
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OIL AND NATURAL GAS FORMATIONOIL AND NATURAL GAS FORMATION
HC formation occurred through a process that took millions of
ears
Biotic remains of tinny plants and animals that lived over
millions of years in aquatic environment
Through years, these plants and animals die and are buried bylayers of sediments and water
called biogenesis
More layers build up and bury the materials deeper and deeper
Enormous pressure from these layers combined with the
pressure from deeper in the earths crust essentially cooked the
biotic materials within certain rock layers to form the crude oil and
natural gas we have today.
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OIL AND NATURAL GAS FORMATIONOIL AND NATURAL GAS FORMATION
The oil seeps upwards through porous rock as aresult of pressure of the overlying layers. It does thisuntil it hits a non porous layer and collects like so.
Exploration geologists are looking out for anticlinesand put a drilling rig and find O&G.
or, w e pe ro eum was e ng orme ,cataclysmic events were occurring elsewhere. Greatearthquakes opened huge cracks, or faults, in the
.downward. Molten rock thrust its way upward,displacing surrounding solid beds into a variety of
. ,dropped downward or moved laterally. Someformations were exposed to wind and water erosionand then once a ain buried. Gulfs and inlets weresurrounded by land, and the resulting inland seaswere left to evaporate in the relentless sun. Earths
very shape had been changed.
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OIL AND NATURAL GAS FORMATIONOIL AND NATURAL GAS FORMATION
Asthe
great
weight
of
the
overlying
rocks
and
sediments
pusheddownward,thepetroleumwasforcedoutofits
.
Itbegantomigrate.Seepingthroughcracksandfissures,
oozingthroughminuteconnectionsbetweentherock
grains,petroleum
began
ajourney
upward.
Indeedsomeofiteventuallyreachedthesurfacewhere
itcollectsinlargepoolsoftarorasoilseeps.
However,somepetroleumdidnotreachthesurface.
ns ea ,
supwar
m gra on
was
s oppe
yan
imperviousorimpermeablelayerofrock.Itlaytrappedfar
beneaththesurface.Itisthispetroleumthattodays
.
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REQUIREMENTSFORHYDROCARBONFORMATIONANDACCUMULATION
SedimentaryBasin
Temperatures
BurialDepth>3km
OrganicMatter
Pressures andtime
ourceroc
Reservoirrock
aproc sea
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REQUIREMENTSFORHYDROCARBONFORMATIONANDACCUMULATION
e ment nput
Organic matterSedimentary basin
2
- 2
Preserved organic matter changes intoa source roc w ncrease se meninput, compaction and burial.
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PETROLEUMSYSTEMELEMENTSGeographic Extent of Petroleum System
OExtent of Prospect/Field
Extent of Play
Geographic Extent of Petroleum System
OExtent of Prospect/Field
Extent of Play
1.Petroleum
Source
rocks
Stratigraphic
Extent of
Petroleum
Stratigraphic
Extent of
Petroleum
2.Reservoir
rocks
Overburden Rock
Seal Rock
Reservoir Rock
Source Rock
Essential
Elements
of
Petroleum
System
e
dimentary
B
asinFillSystem
Pod of Active
Overburden Rock
Seal Rock
Reservoir Rock
Source Rock
Essential
Elements
of
Petroleum
System
e
dimentary
B
asinFillSystem
Pod of Active
3. raps
4.Seals
Underburden Rock
Basement Rock
Top Oil Window
Top Gas Window
Petroleum Reservoir (O)
Fold-and-Thrust Belt
(arrows indicate relative fault motion)
SUnderburden Rock
Basement Rock
Top Oil Window
Top Gas Window
Petroleum Reservoir (O)
Fold-and-Thrust Belt
(arrows indicate relative fault motion)
S 5.M grat on
6.Timing
(modified from Magoon and Dow, 1994)(modified from Magoon and Dow, 1994)
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PETROLEUMSYSTEMELEMENTSSource Rocks
Sedimentar rock containin or anic material, which underheat, time and pressure was transformed to liquid or gaseoushydrocarbons. Source rock is usually shale or limestone.
Reservoir rock
permit the storage and accumulation of crude oil or naturalgas under adequate trap conditions, and to yield the
y rocar ons a sa s ac ory ow ra e upon pro uc on.
Sandstones, limestones and dolomites are the most common.Also in fractured i neous and metamor hic rocks.
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PETROLEUMSYSTEMELEMENTSGood reservoir rocks must have porosity and
permeability
zPorosity
zA measure of the openings in a rock,
open ngs n w c petro eum can ex stzPorosity is the ratio or the pore volume of
Aporeisasmallopenspace
z
PermeabilityProperty of a porous medium to transmit fluidswhen a pressure gradient is imposed.
i.e t eporeso t eroc must econnecte
togethersothathydrocarbonscanmovefromone
poreto
another
Connectedporesgivearockpermeability
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PETROLEUMSYSTEMELEMENTSPetroleum Traps
An barrier to u ward movement of oil or as, allowin eitheror both to accumulate.
It includes a reservoir rock and an overlying updip
.
.
Classified into two basic types: structural traps andstratigraphic traps. Structural traps are traps that are formedbecause of a deformation in the rock layer that contains the
.
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PETROLEUMSYSTEMELEMENTSAn
anticline
is
an
upward
fold
in
the
layers
of
rock,
muchlikeanarchinabuilding.Petroleummigrates
n o e g es par o e o ,an sescape s
preventedbyanoverlyingbedofimpermeable
rock
Afaulttrapoccurswhentheformationsoneither
sideofthefaulthavebeenmovedintoaposition
thatpreventsfurthermigrationofpetroleum.
Strati ra hic tra sare
tra s
that
result
when
the
reservoirbedissealedbyotherbedsorbya
changeinporosityorpermeabilitywithinthe
. . .
petroleumbearingrockiscutoffortruncatedby
anessentially
horizontal,
impermeable
rock
layer
.
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PETROLEUMSYSTEMELEMENTSSealAnimperviousorimpermeablebedcappingthereservoir.
Migration
Movementofgeneratedhydrocarbonsfromthesourcerocktothe
reservoirrock
in
atrap
through
conduits
such
as
permeable
beds,
fractures,andfaults.
Timing
Relationshipbetweenthetimeoftrapformationandtimeof
y rocar ongenera on.
Goodtimingisforthereservoir,trapandsealtobealreadyinplace
beforethesourcerockgenerateshydrocarbonsandmigrationstarts.
Thisissometimescalledthecriticalmoment
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SECURINGLICENSE/LEASEz Afterselectingalikelyarea,therighttodrillmustbesecured
e ore r ngcan eg n.
z Thisusuallyinvolvesleasingthepetroleumrightsofthedesired
from the owner Government for U andas case .
z Conditionsforacquiringthelicence arespecifiedinthepetroleumlegislationandagreements(PSAs).Thesemayinclude:
z Signaturebonus
z Royalty
z ro uc ons ar ng
z Tax
. .
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DRILLINGz nce an area as een se ec e an e r g o r ereon
has been obtained, actual drilling may begin.z The most common method of drilling in use today is rotary
r ng. o ary r ng opera es on e pr nc p e o or ng ahole by continuous turning of a bit.
z The bit, is attached to the drill stem, composed of hollow
eng s o p pe ea ng o e sur ace. s e o e ge sdeeper, more lengths of pipe can be added at the top.
z The drilling fluid, also known in the industry as mud, it isac ua y a prepare c em ca compoun . e r ng mu scirculated continuously down the drill pipe, through the bit,into the hole and upwards between the hole and the pipe to
, .z The flow of mud removes the cuttings from the hole without
removal of the bit, lubricates and cools the bit in the hole,
punctured a high pressure formation.
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DRILLINGe cu ngs, w c are carr e up y e r ng mu , are
usually continuously tested by the petroleum geologist inorder to determine the presence of oil.
The final part of the hole is what the operating company. ,
formation of interest (the pay zone, the oil sand, or theformation that is supposed to contain hydrocarbons) ispene ra e y e o e. s now me or a g ec s on. equestion is, "Does this well contain enough oil or gas to make
it worthwhile to run the final production string of casing andcomplete the well?"
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OILPRODUCTION nce an accumu a on o o as een oun n a
porous and permeable reservoir, a series of wells aredrilled in a predetermined pattern to effectively drain
" ".
Well spacing is usually determined by the distancethe reservoir energy will move commercial quantities
of oil to individual wells.
The rate of production is highest at the start when allo e energy rom e sso ve gas or wa er r ve sstill available. As this energy is used up, productionrates drop until it becomes uneconomical to operate
reservoir.
Secondary recovery methods such as steam injection
9April,2012
or water flooding where Water or steam are injectedinto the reservoir in certain wells in order to renew a
part of the original reservoir energy
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SALEOFOIL Oncetheoilisoutofthegroundand
ntot e o ngtan s, tmust eso .
interesthastherighttotakehisportionofproductioninkind,
t ere ore,ma e isownarrangements
foritssale.
Sometimes,however,alltheholdersofaworkinginterestofawellenter
9April,2012
intothesamearrangementwiththe
samebuyeroftheoilproduction.
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PETROLEUM VALUE CHAINPETROLEUM VALUE CHAIN
LICENSING
EXPLORATION
DEVELOPMENT
PRODUCTION
UPSTREAM
TRANSPORTATION
REFINING
GASPROCESSING MIDSTREAM
DISTRIBUTION
SALES
DOWNSTREAM
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PETROLEUM VALUE CHAIN (2)PETROLEUM VALUE CHAIN (2)
UPSTREAM
Find and proveCommercialhydrocarbons
Acquisition ofconcession
Restoration of sitesStartProduction
Pre-bidExploration
And
Appraisal
Field
DevelopmentProduction Decommisioning
Risk
Seismic and Production Production,
Assessmentstudies
drilling
construction
transportation
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PETROLEUM VALUE CHAIN (3)PETROLEUM VALUE CHAIN (3)
Ac uisition of acrea ePre-bid
z Data acquisition and packaging
z Promotion at petroleum conferences andother fora
z Applicationz Petroleum Act
z Work programs PSA
z ego a ons- n s ry nergy e ro eum,Ministry of Finance, Ministry of Justice
z Award of the licence
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PETROLEUM VALUE CHAIN (4)PETROLEUM VALUE CHAIN (4)
zSearch for petroleum accumulations
EXPLORATION
zMethods include gravity, magnetic, geological mapping,seismic and drilling
zEnds when reservoir(s) have either been found or not
zIdentify presence of hydrocarbons in the subsurface
zEstablishing ability/ease to flowAPPRAISAL
zEstablishing the extent of distribution
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PRELIMINARYGEOLOGICALANDGEOPHYSICALDATAPETROLEUM VALUE CHAIN (5)PETROLEUM VALUE CHAIN (5)
30 3015' 3030' 3045' 31 3115' 3130'30 E 31 E 32 E
Surface geological mapping of the areaAcquisition of gravity and magnetic data
-212 -189 -178 -169 -162 -156 -149 -143 -136 -128 -118 -101
Gravity anomaly
mGals
215'
230'
215'
230'
091-
-170
-160
061-
041
03
1-
"S"S
ARUA
MOYONIMULE
LEGEND
Rift valey sediments:soils and marines
Pleistocene volcanic rocks
Eccaseriesshales(Karro
145'
2
145'
2
022-
012-
002-
08
1-
08
1-
051-
051-
041-
-
-140
031-
031-
-130
031
-
-120
-120
021-
02
1-
-1200
11
-
B
B'
&-&-
"S
"S
"S
"S
ARU
GULU
MAHAGI
Mityana Series
Singoseries: conglomerates, sandstone & subordinate shale
Bunyoro series & Kyogas eries: Shales, arkoses & quartzites
Kibalian System(presumed): Amphibolites.
Madi series: shists, quartzites marbles and gneisses
Karagwe-Ankolean system
Buganda-Toro system
Mirian gneisses: flaggy gneisses,affected by the mirian tectonism in W. Nile
Granites
Undifferentiated Gneisses
Bandedgn eiss of Aruan tectonic age inWest Nile
115'
130'
115'
130'
00
2-
081-
081-
-160
-160
-150
-150
-140140
041-
041-
031
-
031--130
031
-
-120
021-
-120
&-
&-
&-&-
&-&-
&-
"S
"S
%
&-HOIMA
MASINDI
Granites
Cataclastites
Volcanic bodies interpreted from aeromagnetic data
Lake
International boundary
Depth to basement contours in 1000's m.
Railway
Major Road
Faults
River
&- Oil seepsWaki-1 well
10000 0 10000 20000045'
1
045'
1
012-
002-
081-
071-
-160
61-
-160
051-
051-
-150
-150
41-
041-
-140 -1
40
04
1-
-
03
1-
21-
120
-120
110-100
"S
"S
"S
"SMASAKA
KASESE
MUBENDEFORT PORTAL"S Town
metresArc 1960 / UTM zone 36N
30 3015' 3030' 3045' 31 3115' 3130'
0 0 --
"S
"S
"S
"S
"SISHASHA
BUSENYI
MBARARA
NTUNGAMU
RUKUNGIRI
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PETROLEUM VALUE CHAIN (6)PETROLEUM VALUE CHAIN (6) Most common assessment method -
2D or 3D. Pulses of acoustic energy
SEISMIC SURVEYS an : v rat ons or exp os ves
Water: air guns
Distinguishes different rock strata.
Reflected energy measured byreceivers.
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PETROLEUM VALUE CHAIN (7)PETROLEUM VALUE CHAIN (7)DRILLING
Exploration
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PETROLEUM VALUE CHAIN (8)PETROLEUM VALUE CHAIN (8)
DEVELOPMENT
zIncludes drilling wells for production
zPreparing facilities for collection,
zResource base
zProduction facilities
processing and disposal zTransport optionszMarket and sales options
z an r s ana ys s
zCost analysis
zEconomic evaluationzProject execution
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PETROLEUM VALUE CHAIN (9)PETROLEUM VALUE CHAIN (9)
zRemoval of petroleum from a subsurface reservoir to the surface
PRODUCTION
zPreparing petroleum for transportation and/or refining (separation,gauging & storing)
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PETROLEUM VALUE CHAIN (10)PETROLEUM VALUE CHAIN (10)B) MIDSTREAM
1. TRANSPORTATION
ranspor e o s:
Pipeline
Trucks
Water
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PETROLEUM VALUE CHAIN (11)PETROLEUM VALUE CHAIN (11)
2. Refining Crude oil is converted into
several products.
Products depend on both
refinery
Full refinery in Trinidad and Tobago with capacity to refine 160,000bopd
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PETROLEUM VALUE CHAIN (12)PETROLEUM VALUE CHAIN (12)
C) DOWNSTREAM
Downstream involves;
,
Transportation and distribution
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REGULATORYANDINSTITUTIONALFRAMEWORK
REGULATORYFRAMEWORK
REGULATORY
FRAMEWORK
PetroleumExplorationandproductioniscurrentlygovernedby;
1. ExistingLaws
ThePetroleum(ExplorationandProduction)Act,CAP150,LawsofUganda,2000
.
TheEnergyPolicy,2002
TheNationalOilandGasPolicy2008
3. Regulations
ThePetroleumExploration(Conductofexplorationoperations)Regulations1993
.
ro uc on
ar ng
greemen s
WorkPrograms
Fiscalregimes(Rentals,stateParticipation,profitoilshare,Costrecoveryetc)
4.Environment,Wildlife,Waterstatutesandguidelines
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REGULATORYANDINSTITUTIONALFRAMEWORK
NATIONAL OIL AND GAS POLICYNATIONAL OIL AND GAS POLICYUseUse thethe countr scountr s oiloil andand asas resourcesresources toto contributecontribute toto earlearl
achievementachievement ofof povertypoverty eradicationeradication andand createcreate lastinglasting valuevalue toto
societysociety
Provideaframeworkfor:
EfficientpetroleumresourceexploitationandutilisationUseofoilandgasactivities,resourcesandrevenuesto
Emphasizesvalueaddition
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REGULATORYANDINSTITUTIONALFRAMEWORK
NATIONAL OIL AND GAS POLICY CONTDNATIONAL OIL AND GAS POLICY CONTDIm lementation of Polic has CommencedDrafting of new petroleum legislation to operationalise policy
Supporting the introduction of training courses focusing on
petroleum industry like BSc Petroleum Geoscience atMakerere, Uganda Petroleum Institute Kigumba.
eas y u yan promo ees a s men o a
mediumscalerefinery.
.Close Monitoring of biodiversity being undertaken.
.
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REGULATORYANDINSTITUTIONALFRAMEWORK
MINISTRY OF
INSTITUTIONALFRAMEWORKMinister of Energy and Mineral DevelopmentMinister of Energy and Mineral Development
ENERGY AND
MINERAL
DEVELOPMENT
Minister of State for Energy Minister of State for Mineral Development
Electricity Regulatory Authority (ERA)
Minister of State for Energy Minister of State for Mineral Development
Electricity Regulatory Authority (ERA)
Permanent Secretary
Uganda Electricity Generation Co. Ltd.Uganda Electricity Transmission Co. Ltd.Uganda Electricity Distribution Co. Ltd.
Kilembe Mines
Rural Electrification Agency (REA)
Permanent Secretary
Uganda Electricity Generation Co. Ltd.Uganda Electricity Transmission Co. Ltd.Uganda Electricity Distribution Co. Ltd.
Kilembe Mines
Rural Electrification Agency (REA)
Geological Survey
Energy Resources Petroleum Supply Petroleum Explora-tion and Production
Directorate of Energy and M ineral Development (D/E&MD)
Finance and Administration
De artment
Geological Survey
Energy Resources Petroleum Supply Petroleum Explora-tion and Production
Directorate of Energy and M ineral Development (D/E&MD)
Finance and Administration
De artment
Administration
Geology Div.
Geology Div.
Laboratory Div
Administration
Geology Div.
Dept
Sectorial Planning / PolicyAnalysis
Administration
Geology Div.
Geology Div.
Laboratory Div
Administration
Geology Div.
Dept
Sectorial Planning / PolicyAnalysis
Geophysics Div. Mines Div.
Geodata Div.
Geophysics Div.Resource Centre Geophysics Div. Mines Div.
Geodata Div.
Geophysics Div.Resource Centre
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REGULATORYANDINSTITUTIONALFRAMEWORK
PETROLEUM EXPLORATION AND PRODUCTION DEPARTMENT (PEPD)
COMMISSIONER
ASSIST. COMMISSIONER
(Geology)
PRINCIPAL GEOLOGIST
(Development & Production
PRINCIPAL GEOLOGIST
(Exploration)
U1
U2PRINCIPAL GEOPHYSICIST
(Seismic & Wells)
PRINCIPAL GEOPHYSICIST
(Gravity & Magnetics)
ASSIST. COMMISSIONER
(Geophysics)
SENIOR GEOLOGIST(Well Site)
SENIOR GEOCHEMIST SENIOR GEOLOGIST(Exploration)
PETROLEUM
ENGINEER
(2)
GEOLOGIST
(Well Site)
(2)
GEOLOGIST
(Basin Evaluation)
(2)
ORGANIC GEOCHEMIST
(2)
PALYNOLOGIST
U3
U4
SENIOR G EOPHYSICIST(Gravity & Magnetics)
SENIOR G EOPHYSICIST(Seismic & Wells)
GEOPHYSICIST
(Seismic & Wells)
(2)
GEOPHYSICIST
(Gravity & Magnetics)
(2)
PERSONAL
SECRETARY
SENIOR LABORATORY
TECHNICIAN
SENIOR GEOLOGICAL
ASSISTANT
U5
SENIOR GEOPHYSICAL
TECHNICIAN
SENIOR GEOPHYSICAL
TECHNICIAN
LABORATORY
TECHNICIAN
GEOPHYSICAL
STENO
SECRETARY
U6
U7
U8
STORES
ASSISTANT
GR 2
GEOLOGICAL
ASSISTANT
TECHNICIAN
(2)TECHNICIAN
(2)
LABORATORY
ATTENDANT
COPY
TYPIST
GEOLOGICALATTENDANT
SURVEYING
ATTENDANT
(2)
WATCHMAN (2)
COXSWAN (2)
OFFICE
ATTENDANT
(4)
DRIVER/MECHANIC
(9)
NB Posts indicated in boxes are to be filed by staff seconded from Ministry Headquaters.
GR-Grade
Scale U1 U2 U3 U4 U5 U6 U7 U8 Total
Approved Posts 3 4 5 18 2 4 3 21 60
Filled Posts 3 3 3 16 1 3 3 13 45
Vacant Posts 0 1 2 2 1 1 - 8 15
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REGULATORYANDINSTITUTIONALFRAMEWORK
Creation of value from petroleum activities by:FUNCTIONS OF PEPD
Initiating Policy and Legislation for the sub-sector of petroleum
exploration and development
Promotion of petroleum exploration
Participation in contract negotiations before award of licenses
Monitoring and regulating the work of oil companies licensed in the
country
n er a e na ona capac y u ng or e ups ream pe ro eumsub-sector
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REGULATORYANDINSTITUTIONALFRAMEWORK
zOther Key Players,
Development
Ministry of Justice and Constitutional Affairs
Uganda Revenue Authority
Auditor Generals Office
Bank of Uganda
National Environment Management Authority
Uganda Wildlife Authority (UWA)
rec ora e o a er esource anagemen
General public
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CHALLENGESCHALLENGES
Experiencesxperiences fromrom someome oilil andnd gasasd ii t iiroducingroducing countriesountries
Politicaland
Security
challenges
Environmentalchallen es
Lesionsfromproducingcountries
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
NORWAY, RUSSIA TO
..
RESTART BARENTS SEADISPUTE TALKS
The disputed Barrents Sea
area covers an area of173,000 km2
Estimated to hold vastresources es ma e abillion barrels of oilequivalent
Disputedzone n ouc a e or exp ora on
and development for thelast 30 years
ue e y po ca es re ocontrol natural resources
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
TERRITORIAL DISPUTES CONTDTERRITORIAL DISPUTES CONTD
,
AGREEMENT ENDING DECADES-
OLD BORDER DISPUTE
Share the 1,000 mile oil rich Bakassipeninsula in the Gulf of Guinea
barrels of oil
Have been at war for control of the
In 2002, World Court ruled at theHague in favour of Cameroon
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
ARETERRITORIALDISPUTESLIKELYFORUGANDA?z Shifting Semliki Course
Lack of GPS Coordinates
Some references may no longer
exist since 1915 when the treatywas signed between Belgium andUK establishing the border
z Invisible boundary along LakesAlbert and Edward Sophisticated positioning
equ pmen may no a ay ears othe other parties
Difficulties of agreeing the
Picturesshowing the
meandering
River
Semliki that
Uganda from
DRCA boat on Lake Albert
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
2. SABOTAGE / CIVIL UPRISING2. SABOTAGE / CIVIL UPRISING
OIL EXPORT IN NIGERIA
Oil workers frequently kidnapped by
Even aboard modern platforms
Niger Delta (MEND), demands a bettershare of oil resources
dimension
Civil strife is costing Nigeria 500,000,
US$ 25 million per day
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
SABOTAGE / CIVIL UPRISINGSABOTAGE / CIVIL UPRISING
Rebellions in many African countieshave dragged on for long because
Ivory Coast
Angola
Guinea
Central African Republic (CAR)
etc.
Sabotage is extremely costly, sincethe industry employs veryexpensive equipment and facilities AproductionfacilityattheEspoir fieldin
vory oas
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
3. CORRUPTION3. CORRUPTION
AT PLAY IN CHADS REBELLION
Chad produces more than 160,000 barrels
The future of this fragile oil-producingnation in north-central Africa remains
One of the basic factors behind theinstability an element that is central to
oil wealth
Three years since the first barrel, publicinfrastructure are nearl nonexistent
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
CORRUPTION CONTDCORRUPTION CONTD
,theft, mismanagement, conflict, corruption, poverty
and misery in all its forms.
Have we learnt any lessons about what to avoid?
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
4. GOOD GOVERNANCE4. GOOD GOVERNANCE
z Not manifested in the oil and gas industry in Africa
z Governance is like a chain
A chain is as strong as the weakest link
We are all art of the chain
We share responsibility
z Uganda has a unique opportunity to be an example to
the rest of Africa of good governance in the oil and gasindustry
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
5. EXTERNAL AGGRESSION5. EXTERNAL AGGRESSION
Iraqs 112 billion barrels of provenoil reserves
The worlds second largest, behindSaudi Arabia.
Lack of investment and restrictionson imports of machinery andtechnology have taken their toll onthe oil industry which was also
battered during the Gulf War.
Allowed to export only a limitedamount of oil under the UNs oil-for-food programme.
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
6. TRANSPARENCY AND ACCOUNTABILITY6. TRANSPARENCY AND ACCOUNTABILITY
been Transparency and Accountability in the oil
n ustry, t e at ons ave per orme we nother sectors as well.
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
7. DUTCH DISEASE7. DUTCH DISEASE
The high Oil prices disrupted many economies Focusing on oil revenues and ignoring other sectors of
the economy ase o ger a
Therefore:
Let us Have Proper plans. Oil should support other sectors of the economy Create a special reserve fund with stringent conditions for its utilization
Case of Norway
It should be remembered that:
Oil is a non-renewable resource and we should Investoil revenues wisely for the future
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
8. INSTITUTIONAL FRAMEWORK8. INSTITUTIONAL FRAMEWORK
Policies, laws, regulations and institutions need to bein place
Many countries discover and some start producing oil
and gas without the necessary institutional framework
agreements and has had to depend on otherorganizations (IMF/WORLD BANK) to manage the
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
9.9. HIGH OIL AND GAS PRICESHIGH OIL AND GAS PRICES
Governments asking to re-negotiate their contracts with oil companies
E.g. Venezuela, Bolivia, Algeria, UK, France,Russia etc.
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
10. PIPELINES10. PIPELINES
Oil and gas transportation is oftendone through long pipelines
Pipelines need to be protectedagainst sabotage
Right of way may have to benegotiated with neighboring
relations
Tanzania gas pipelineconstruction
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
11. Need for communities not to11. Need for communities not tocause insecuritcause insecurit
communities have beenignored, there have been:
Siphoning
Breaking/puncturingpipelines to siphon crude oil
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POLITICAL AND SECURITYPOLITICAL AND SECURITY
c) Sabotage
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ENVIRONMENTALCHALLENGESMain EnvironmentalThe Oil and Gas
OVERVIEW OF ASPECTSOVERVIEW OF ASPECTS
AspectsThe Oil and GasIndustry Air emissions (CO2, VOC,
X, X
Mud and cuttings from
drilling
z Production
Produced water handling
Hazardous waste
processing
z Transportation
Accidental oil spills
Soil and roundwater
z Marketing
pollution
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ENVIRONMENTALCHALLENGES
OilspillcleanupoperationFlowtesting
BlowoutDrillingmud
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LESSONSFROMPRODUCINGCOUNTRIES Boundary disputes
The boundary needs to urgently be demarcated
Should attempt to solve oil and gas issues through Dialogue
Handle all oil and gas issues in a transparent and accountablemanner
on nue o ave s a e po cs an goo secur y
Exploration workers kidnapped in Pakwach in 2005 by gunmen
Attack on Kichwamba Technical Colle e ha ened when
drilling of TURACO-1 was being undertaken
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LESSONSFROMPRODUCINGCOUNTRIESCont
Ownership of Resource
Fuel prices
How cheap can it get?, Norway is the 3rd largest
exporter yet petrol cost US$ 1.8
Suspicion and conflict likely
Radio talk shows show historical grievances
and antagonism
Source: Daily MonitorThursday, July 13, 2006
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EXPECTATIONFROMSTATESECURITYAGENCIES Provision of security to oil and gas activities during exploration,development and production
,
Activities near DRC Security ?
Knowledge of the petroleum industry
Investment usually very high and time is costly
Geological mapping and geophysical surveys (US$ 100,000 300,000)
Seismic surveys (US$ 1 8 million)
Drilling one well (US$ 3 12 million)
A lot of equipment transported from Mombasa to the field,
others come by air through Entebbe
Participants include national and a large number of foreignworkers
All require security
Participants aspirations may not always be in harmony with the
aspiration of the country
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EXPECTATIONFROMSTATESECURITYAGENCIES
In securing and facilitating investments in oil and
gas, its important to remember the overriding
Large investments made by oil companies and the
va ue a ac e o em y e coun r es can ea o
compromising national interests and sometimes
sovereignty
In the amidst of any excitement, these needs to beanticipated and prepared for
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EXPECTATIONSFROMTHEMEDIA Dissemination of information to the public
Status of the licensing
Challenges
ee s o e sec or
Peo le use information to create knowled e but not ustin the sense of data and facts but in the form ofrepresentations that provide meaning and context for
This will ensure trans arenc and accountabilit inundertaking the activities
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THEFUTUREThepast&present;Akeytothefuture.
Source,Reservoir,Traps,Seals,Migration
OilCompanyinterests The Future:
EconomicBoom,Ruraldevelopment,etc. OPEC
9April,2012
Whati wehitagiantElephantlikeIraqorIran?
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CONCLUSION
1. Oiland/or
gas
is
the
life
blood
of
modern
economies
2. Managementoftheseresourcesneedtobetakencautiouslybecausetheyarenonrenewable
.
information
to
all
stakeholders4. Theroleofmediainensuringinformationdissemination
5. Knowledgeispowerletsshareittoempowerothers.Knowledgeisthemostimportantfactorofproduction
6. Weallneedtoembracethegiftmothernaturehasgivenusandguarditjealously
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LYOIDAH KICONCOLYOIDAH KICONCOMscMsc, Geology, Geology--Petroleum GeologyPetroleum Geology
MscMsc, Geology, Geology--HydrogeologyHydrogeology
Dip. Mgt of Petroleum OperationsDip. Mgt of Petroleum Operations
. ,. ,
68
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