Science of Oil - From Formation to Extraction

7/28/2019 Science of Oil - From Formation to Extraction

1/68

"SCIENCEOFOIL:FROM"SCIENCEOFOIL:FROMFORMATIONTOEXTRACTION"FORMATIONTOEXTRACTION"

ByBy

LYOIDAH KICONCOLYOIDAH KICONCOGEOLOGISTGEOLOGIST

to

AfricanCentreforMediaExcellence(ACME)

10TH APRIL2012


2/68

PRESENTATIONOUTLINE1. Definitions

.

3. PetroleumSystemElements

. epe ro eum

a ue

a n

5. InstitutionalandRegulatoryFramework

6. Expectations romt eMe ia

7. Challenges

8. Conclusions


3/68

PETROLEUM

Thisisah drocarbon H&C , enerated

bynaturalmechanismsandmanifestsinformofSolid li uidor asto ieldfuels.

9

April,

2012


4/68

PETROLEUMGEOLOGY

formationinthesubsurface

necessitiesforitsformation,migration,entrapment

.

9

April,

2012


5/68

SEDIMENTARYBASINSiteswherepetroleumisformedbychemicalreactions

fromsedimentarybiogenicprecursormaterial,whereitis

redistributedbymigrationviapermeablepathways,and

whereit

is

dumped

and

stored

in

the

reservoir

rocks

or

dissipatedanddestroyedbychemicalreactions

Anygeographicalfeatureexhibitingsubsidenceand

.

buried,theyaresubjectedtoincreasingpressureandbegin

9

April,

2012

.


6/68

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.


7/68


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.


8/68


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.


9/68


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

.


10/68

REQUIREMENTSFORHYDROCARBONFORMATIONANDACCUMULATION

SedimentaryBasin

Temperatures

BurialDepth>3km

OrganicMatter

Pressures andtime

ourceroc

Reservoirrock

aproc sea

9April,2012


11/68

REQUIREMENTSFORHYDROCARBONFORMATIONANDACCUMULATION

e ment nput

Organic matterSedimentary basin

2

- 2

Preserved organic matter changes intoa source roc w ncrease se meninput, compaction and burial.

9April,2012


12/68

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)


13/68

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.


14/68

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


15/68

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

.


16/68

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

.


17/68

PETROLEUMSYSTEMELEMENTSSealAnimperviousorimpermeablebedcappingthereservoir.

Migration

Movementofgeneratedhydrocarbonsfromthesourcerocktothe

reservoirrock

in

atrap

through

conduits

such

as

permeable

beds,

fractures,andfaults.

Timing

Relationshipbetweenthetimeoftrapformationandtimeof

y rocar ongenera on.

Goodtimingisforthereservoir,trapandsealtobealreadyinplace

beforethesourcerockgenerateshydrocarbonsandmigrationstarts.

Thisissometimescalledthecriticalmoment


18/68

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

. .


19/68

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.


20/68

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?"


21/68

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


22/68

SALEOFOIL Oncetheoilisoutofthegroundand

ntot e o ngtan s, tmust eso .

interesthastherighttotakehisportionofproductioninkind,

t ere ore,ma e isownarrangements

foritssale.

Sometimes,however,alltheholdersofaworkinginterestofawellenter

9April,2012

intothesamearrangementwiththe

samebuyeroftheoilproduction.


23/68

PETROLEUM VALUE CHAINPETROLEUM VALUE CHAIN

LICENSING

EXPLORATION

DEVELOPMENT

PRODUCTION

UPSTREAM

TRANSPORTATION

REFINING

GASPROCESSING MIDSTREAM

DISTRIBUTION

SALES

DOWNSTREAM


24/68

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


25/68


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


26/68


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


27/68

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


28/68

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.


29/68

PETROLEUM VALUE CHAIN (7)PETROLEUM VALUE CHAIN (7)DRILLING

Exploration


30/68


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


31/68


zRemoval of petroleum from a subsurface reservoir to the surface

PRODUCTION

zPreparing petroleum for transportation and/or refining (separation,gauging & storing)


32/68

PETROLEUM VALUE CHAIN (10)PETROLEUM VALUE CHAIN (10)B) MIDSTREAM

1. TRANSPORTATION

ranspor e o s:

Pipeline

Trucks

Water


33/68


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


34/68


C) DOWNSTREAM

Downstream involves;

,

Transportation and distribution


35/68

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


36/68


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


37/68


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.

.


38/68


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


39/68


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


40/68


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


41/68


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


42/68

CHALLENGESCHALLENGES

Experiencesxperiences fromrom someome oilil andnd gasasd ii t iiroducingroducing countriesountries

Politicaland

Security

challenges

Environmentalchallen es

Lesionsfromproducingcountries


43/68

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


44/68


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


45/68


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


46/68


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


47/68


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


48/68


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


49/68


CORRUPTION CONTDCORRUPTION CONTD

,theft, mismanagement, conflict, corruption, poverty

and misery in all its forms.

Have we learnt any lessons about what to avoid?


50/68


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


51/68


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.


52/68


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.


53/68


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


54/68


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


55/68


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.


56/68


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


57/68


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


58/68


c) Sabotage


59/68

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


60/68

ENVIRONMENTALCHALLENGES

OilspillcleanupoperationFlowtesting

BlowoutDrillingmud


61/68

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


62/68

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


63/68

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


64/68

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


65/68

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


66/68

THEFUTUREThepast&present;Akeytothefuture.

Source,Reservoir,Traps,Seals,Migration

OilCompanyinterests The Future:

EconomicBoom,Ruraldevelopment,etc. OPEC

9April,2012

Whati wehitagiantElephantlikeIraqorIran?


67/68

CONCLUSION

1. Oiland/or

gas

is

the

life

blood

of

modern

economies

2. Managementoftheseresourcesneedtobetakencautiouslybecausetheyarenonrenewable

.

information

to

all

stakeholders4. Theroleofmediainensuringinformationdissemination

5. Knowledgeispowerletsshareittoempowerothers.Knowledgeisthemostimportantfactorofproduction

6. Weallneedtoembracethegiftmothernaturehasgivenusandguarditjealously


68/68

LYOIDAH KICONCOLYOIDAH KICONCOMscMsc, Geology, Geology--Petroleum GeologyPetroleum Geology

MscMsc, Geology, Geology--HydrogeologyHydrogeology

Dip. Mgt of Petroleum OperationsDip. Mgt of Petroleum Operations

. ,. ,

68

Documents

Science of Oil - From Formation to Extraction