Tuesday, November 3, 2009

Fresh Uganda oil find ‘Africa’s biggest’



From The Times January 14, 2009

Robin Pagnamenta Heritage Oil announced details of a large oil discovery in Uganda yesterday, which the company claimed could be the largest onshore discovery in sub-Saharan Africa.

Heritage said that its latest discovery – Giraffe1 – in the Lake Albert region, could total at least 400 million barrels of oil.

However, Paul Atherton, chief financial officer, told The Times that the wider field it was developing, dubbed Buffalo-Giraffe, had several “billions of barrels of oil in place”, although it was unclear how much of this would be recoverable.

He said that the field, which is 9,000 square kilometers in size – or six times the size of Greater London – was unquestionably the largest onshore discovery made in sub-Saharan Africa in at least 20 years, possibly ever.

Mr Atherton said that of the 18 wells the company had drilled in the basin so far, all had produced oil. “Clearly the entire basin is full of oil,” he said. “It’s a world-class discovery, the most exciting new basin in Africa in decades.”

Previously, the largest onshore fields discovered in sub-Saharan Africa were at Rabi-Kounga in Gabon, where 900 million barrels were found in 1985, and at Kome in Chad, where 485 million barrels were found in 1977.

Mr Atherton said that it would take at least another three years to start commercial production. The crude could be exported by road or rail, he said, but analysts believe that the most practical solution would be to build an 806-mile pipeline to take it to Kampala, Uganda’s capital, and then the Kenyan coast. The pipeline would need to be heated and designed to traverse swampy and mountainous land. It would cost an estimated $1.5 billion (£1 billion) to complete.

Heritage and its partner Tullow Oil, which also has a 50 per cent equity stake in the project, would need to demonstrate that the field could produce at least 400 million barrels of oil to justify the cost of building such a pipeline. Richard Griffith, an Evolution Securities analyst, said the latest discovery “thrashed” this commerciality threshold.




Copyright 2009 Times Newspapers Ltd.

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