Minerals, oil and gas

Minerals, oil and gas

In 2006, commercially viable oil deposits were discovered in Uganda around the Albertine Graben region. Effective oil exploitation and management has since been embarked on for national growth and development. A total of 6.5 billion barrels of oil was estimated in 2014 and 100 billion cubic feet of gas in less than 20 percent of the Albertine Graben, with 1.5 billion barrels recoverable.

According the NDPII, a total of 111 exploration and appraisal wells have been drilled in the country since 2006, out of which 99 wells encountered oil and/or gas in the subsurface. This represents a success rate of over 89 percent, which is among the highest globally. The total oil reserves confirmed is estimated at 6.5 billion barrels of oil and 100 billion cubic feet of gas in less than 20 percent of the Albertine Graben, A total of 127 wells have been drilled, of which 115 have encountered hydrocarbons, and 21 oil and gas discoveries have been made in the Albertine Graben.

Like other primary growth sectors, the minerals, oil and gas sector has been singled out as one of the key growth priorities of focus for the NDP II period. Government will focus efforts on adding value to the raw minerals through beneficiation and investing in major oil and gas infrastructure such as;  the refinery and associated pipelines. Six key minerals are earmarked for exploitation and value addition, these include; Iron ore, Limestone/Marble, Copper/Cobalt, Phosphates, Dimension stones and Uranium. In addition, the exploitation of an estimated resource of 6.5 billion barrels of oil with a recoverable potential of 1.4 billion barrels is prioritized. 

Commercialization of oil and gas resources is one of the key objectives of Government. A number of interventions have been undertaken in the sector in order to derive maximum benefits for the country.  Government is in the process of building an oil refinery, which will ensure a secured supply of petroleum within Uganda, the region and the world at large.   In FY 2016/17, a feasibility study was undertaken, indicating that the refinery is economically viable and profitable for Uganda.  A crude oil export pipeline is to be established with an alternative outlet for produced oil to ensure return on investment for Government.   Studies on the crude export pipeline were conducted and the Hoima (Uganda) – Tanga (Tanzania) route was selected as more secure at a cheaper cost and lower tariff. Pertinent to this, the government of Uganda and Tanzania signed a memorandum of understanding to develop the crude oil pipeline that would be enrooted to Tanga.

 

Construction of a phosphate industry is underway in Tororo. The project is expected to manufacture key products such as phosphate fertilisers, steel products, sulphuric acid, and rare earth minerals and generate electricity with the capacity of 12 megawatts. Underground study to ascertain the quality and quantity of phosphate in the area, alongside land leasing, relocation and compensation of local communities was carried out.  Currently the assembling of the processing plant equipment is on-going in China and is expected to be shipped in the course of 2017.

Government further inaugurated the African Gold Refinery in February, 2017.  The refinery has been operating since 2014, and is the biggest Gold refinery in East African region. Gold is now Uganda’s second leading export commodity, after coffee. The value of gold exports rose to US$ 204 million in FY 2015/16 up from US$ 0.23 million in FY 2014/15. In order to support the development of the oil, gas and mineral sub-sectors, Government has continued to expedite the construction of Oil roads and Bridges in order to achieve oil production by 2020.