27 August 2011
Tullow Oil – Uganda’s Oil & Gas Industry
By Elly Karuhanga, President Tullow Uganda
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
1
Contents
Section
About Tullow Oil
Exploration and development update
Environmental aspects
Opportunities in Oil and Gas
Local content
Conclusions
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
2
About Tullow Oil
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
Tullow in Sub-Saharan Africa
• Africa’s leading independent oil and gas
exploration and production company
• Tullow is a FTSE 100 company
• Listed on the :
– London stock exchange
– Irish stock exchange
– Ghana stock exchange
• Operating in 15 different countries in Africa
• Mega Projects Uganda and Ghana
– Ghana: Jubilee field to reach plateau of
120,000 bopd by year end
– Uganda: final development plan will
detail delivery of production in excess of
200,000 bopd
Uganda: > 1.1 billion barrels discovered (P50); 1.4 billion barrels yet to find (P50)
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
4
Tullow Oil in Uganda
Tullow History in Uganda:
- Energy Africa 2004 (in Uganda since 2001)
- Hardman in 2007
- Heritage in 2010
• Farm down to CNOOC and Total
• Tullow Uganda has >200 staff (85% Ugandan)
• 2015 – Target for achieving oil production
(from primary phase of production)
• Q4 2011 – sale of crude oil produced by testing
Tullow is committed to investing in Uganda for
the Long term
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
5
Exploration and development update
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
Update on exploration activity in Uganda
World-class basin discovered
• High success through technical excellence
• 96% E&A success ratio –
43 out of 45 wells successful
Ugandan Resources
Discovered Resources
> 1.1 billion bbls
Future potential
1.4 billion bbls
~ 20 discoveries
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
>2.5bn
boe
Together with our new partners, Total and
CNOOC, Tullow is working with the
Government of Uganda to transform this
discovery into a world class development
7
Basin Development Concept
• Field developments: Upstream
- Multiple oil fields
• Gathering system: Midstream
- Collection Hub
- Storage for onward transport
• Distribution: Downstream
- Refinery
- Power generation
- Export of excess crude (road, rail, pipeline)
to international market
Basin production potential is in excess of
200,000 bbls/day
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
8
Timeline for Development
Development Strategy
Boepd
• Phased Development
100,000’s
• Growth throughout the
Petroleum Industry value
chain
10,000’s
Regional & Beyond
1,000’s
Uganda Focus
• Proving Environmental
Performance
Test & Early
Development
0 - 2 years
•Trucking & Pipe
•Refining
2 - 5 years
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
Full Basin
Development
• Allowing the National
Institutions to gain
experience
5 - 10 years
9
Importance of support infrastructure
• Upgraded local road network
• Improved connectivity with
other parts of the country
• New airfields
• Harbour to support lake
drilling
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
10
US$ 8
– 10 billion
US$ billions
Project investment
Upstream exploration
Upstream development
Refinery
Pipeline
Total
• With phased development comes phased investment
• Significant expenditure on downstream infrastructure is required to unlock oil production
-
Regional refinery
-
Excess crude export pipeline
-
Roads/rail for distribution of refined products
-
Air for personnel and equipment movement
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
11
Challenges: moving from Exploration to Development
Oil field Lifecycle
Legislative Climate
Explore &
Appraisal
•Building an attractive investment climate
•International players and local entrepreneurs
Environment & Communities
Develop
•Pristine, sensitive environment
•Land based development
Skills
Produce
•Shortage of oilfield skills in region
•Requirement to rapidly build capacity
Transparency
Decommission
•Unprecedented levels of investment & revenue
•Transparency essential
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
12
Environmental aspects
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
Way Forward for Environmentally world-class development
• We are operating in a sensitive environment, therefore
need to operate a world class development
• Undertake Environmental and Social impact assessments
• Work in collaboration with our regulators; NEMA, UWA,
PEPD and other government agencies
• Adhere to environmental regulatory requirements
• Adhere to international Oil and Gas Safety standards in all
our operations
• Waste disposal for zero environmental impact
Through working with local and international partners, this development will set new
standards for development in harmony with the natural environment
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
14
Opportunities in Oil and Gas
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
Development of Local Skills and Employment Opportunities
• It is estimated that the industry will create 10,000 jobs
• Ugandan entrepreneurs must step up to the challenge
of establishing oilfield service companies
• Training will be made available (through public and
private ventures) so that all Ugandans can participate
• Local employment
– Employing over 1,500 locals from Hoima and
Buliisa District
– 85% Ugandan employees in the company
• White collar workers
Development of Local
Content capabilities,
appropriate for all levels of
the industry, is key to the
success of the industry
– Technical: Qualified engineers, geologists etc
– Business: Lawyers, accountants, managers etc
• Artisans (Technicians)
– Pipefitters, welders, masons, carpenters
– Drillers, Operators
• Labourers
– Rig workers, security guards, helpers
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
16
Business & Employment Opportunities in the Oil Industry
• Many of these services will
be available but will need to
be further developed and
supported to meet the
industry and expectations
• Opportunities to provide
both direct and indirect
services
• Specialist services and
capabilities take time and
investment to develop
Development of Local Content capabilities, appropriate for all levels of the industry, is key to the
success of the industry
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
17
Partnership with Local Communities
• Working in partnership with Local Communities
is essential to ensure that everyone benefits
from the onset of the industry
• Tullow works in a variety of arenas with local
and international specialists on a number of
Social Enterprise projects
- Healthcare
- Education
- Enterprise development
- Environment
• Investments at a community level will be
up-scaled with the onset of development
Local Communities are an integral part of a successful oil development
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
18
In Conclusion
Uganda is at the dawn of a new era
This is history in the making
• Uganda’s economy is set to transform
• It will also be transformational for the
region
• Ugandans must be a part of this journey
• This is an opportunity for Uganda to set
a new standard in Africa
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
19
Tullow Uganda Operations Pty Ltd
Plot 15, Yusuf Lule Road
P. O. Box 16644
Kampala, Uganda
Tel: +25 6312564000
Fax: +25 6312564066
Tullow Oil – Uganda’s Oil & Gas Industry - 27 August 2011
20