Kenya’s Cabinet Secretary for Petroleum and Mining, John Munyes yesterday May 8th , 2019 graced the official opening of the 9th East African Petroleum Conference and Exhibition 2019, themed East African Region – the destination of choice for Oil and Gas Investment Opportunities to enhance Socioeconomic Transformation.
The Cabinet Secretary disclosed that Kenya was on course with the exploitation of its oil fields with the country expected to ship its first 200,000 barrels of crude oil in June 2019 after hitting the 200,000-barrel mark set by the government for it to be able to ship out the product.
The Cabinet Secretary also disclosed that Tullow Oil had so far transported 87,000 barrels of crude oil to the Kenya Petroleum Refineries storage tanks in Mombasa.
According to Munyes, Kenya has a total of 94 wells of oil that have been drilled, 63 exploration blocks that have been gazetted, 276 blocks licensed and 36 blocks open to investors, adding that “the government was constructing a 820km 20-inch diameter, South Lokichar – Lamu Crude Oil pipeline that will connect Turkana to Lamu Port, which will be operational by 2022.”
The Cabinet Secretary revealed other major petroleum infrastructure that have been put in place/or whose construction is ongoing including the 450km, 20-inch diameter multi-product Line 5 from Mombasa to Nairobi, which has been completed; construction of four tanks of 133,000 cubic metres in Nairobi to ensure adequate storage of products coming through Line 5; the 122 km, 10-inch diameter multi-product line from Sinendet to Kisumu, and; completion of the Kisumu Oil Jetty.
Munyes called upon investors to come to the EAC not only to invest in the Oil and Gas sectors but also to support the Partner States develop their fledgling petroleum industries.
“There are challenges in this area and we really need your support,” said the Cabinet Secretary.
On his part, the Tullow Oil Executive Vice President for East Africa, Mr. Mark MacFarlane, disclosed that Tullow Oil had invested $2 billion in Kenya, and it was upbeat that they will hit the 200,000 barrels required for shipment. Tullow discovered crude oil in Uganda in 2006 and later in Kenya in 2012 but no exports have been made as yet.
Addressing delegates on behalf of the Secretary General of the EAC, Amb. Liberat mfumukeko, the Deputy Secretary General in charge of Productive and Social Sectors, Christophe Bazivamo, said that a few years ago, the East African region did not attract significant investments in the oil and gas sector but that today, the region had benefited from advances in technology and management of exploration and production, which has led to the discovery of commercially viable oil and gas deposits.
“Recent discoveries were very impressive; Uganda has 6.5 billion barrels of oil and 500 Billion cubic feet (Bcf) of gas; Kenya 754 million barrels of oil, Tanzania 57.25 Trillion cubic feet (Tcf) of gas, Rwanda 63 billion cubic metres of methane gas and huge commercial reserves in South Sudan, and reports at hand indicate that exploration process in Burundi is also on going and that it has reached an advanced stage,” said Bazivamo.
The Deputy Secretary General informed the delegates that the ongoing event aims at fulfilling one of the objectives of the Community enshrined in Chapter 19, Article 114 of the EAC Treaty and Article 40 of the EAC Common Market Protocol of promoting sustainable utilization of the natural resources of the Partner States and putting in place measures that would effectively protect the natural environment of the Partner States.
Bazivamo said that exploitation of petroleum resources on the Continent, had certainly not achieved the intended socio-economic transformation, hence, “we have the obligation to draw lessons and ensure we are better off in the EAC region.”
“Since the inception of the EAPCE in, impressive achievements have been reported in every subsequent conference and I am happy to report that the EAC Partner States have established clear, harmonized, stable, regulatory, legal and fiscal frameworks that are supporting the achievements and developments in the sector,” he said.
Uganda’s second open competitive licensing round
At the Conference, Uganda’s Minister of Energy and Mineral Development, Eng. Irene Muloni launched Uganda’s second open competitive licensing round in petroleum exploration, development and production in Uganda.
At the launch, Eng. Muloni disclosed that the licensing round covers five (5) Exploration Blocks in the Albertine Graben, which is the most prospective area of exploration, development, and production in Uganda. The Blocks are:-LR2_2019_Block01 (Avivi), area coverage of 1026km2; LR2_2019_Block02 (Omuka), area coverage of 750km2; LR2_2019_Block03 (Kasuruban), area coverage of 1285km2; LR2_2019_Block04 (Turaco), area coverage of 637km2; and LR2_2019_Block05 (Ngaji), area coverage of 1230km2.
The Minister hailed President Yoweri Kaguta Museveni for his visionary leadership and strong guidance he has given to the sector since 10thFebruary, 1986. She also commended the EAC Partner States for the support they have provided in facilitating the development of the oil and gas sector in Uganda and the region at large.
The licensing round was driven by a number of factors including, among others, the establishment of additional resources and reserves to the current confirmed 6 billion barrels of oil, out of which about 1.4 billion barrels are recoverable, and 500 billion cubic feet of non-associated gas; and existence of comprehensive and robust legal, regulatory and institutional frameworks which guarantee certainty to investors. The second launch follows the first licensing round through competitive bidding undertaken in 2017.
Uganda made its first commercial oil discovery in 2006. To date, over 121 wells have been drilled with a success rate of over 88%. Preparations are under way to commence production following the issuance of production licenses to Total E&P Uganda B.V, Tullow Uganda Operations Pty Ltd, and CNOOC Uganda Ltd. The commercialization of the oil in Uganda will involve export of part of crude oil by the East Africa Crude Oil Pipeline through Tanga Port in Tanzania.
The 9th East African Petroleum Conference and Exhibition 2019 is being attended by Ministers in charge of the sectors in the Partner States; Members of the East African Legislative Assembly; Members of National Parliaments; Members of the Diplomatic Corps, Development Partners and investors; Petroleum Sector Business Community; and Members of the EAC Regional Petroleum Conference and Exhibition Steering Committee.