Uganda: Irish oil explores discover natural gas

(SomaliNet) Natural gas reserves have been discovered by oil explorers in western Uganda and according to experts, the gas could generate power as early as next year.

The gas, found in Hoima, flows at a rate of 14 million cubic feet per day,
Irish oil explorers Tullow Oil announced in a statement.

The current world market prices of $7 per1,000 cubic feet, this amounts to about $98,000 (sh162m) a day from the one well where gas has been discovered.

“When the company drilled Nzizi 2, the idea was to establish the extent of oil deposits in the area, but the hydrocarbons found in this well flowed gas instead. It was not anticipated in the studies carried out,” Honey Malinga, a commissioner in the petroleum exploration and production department said onThursday.

The company, which has successfully drilled four exploration wells in Uganda, said opportunities to utilise the gas as an energy input for early production system will now be studied. The Government plans to process oil for power production by 2009.

Malinga said the economics of gas on the world market had greatly improved in the past few years because of its multiple functions.

“It can be used to push out the oil from the ground if the pressure is low. It can also be used for manufacturing power. Tanzania and Nigeria are producing so many megawatts of power out of their gas. But it can also be used for domestic purposes such as cooking or in hospitals and factories,” he said.

Uganda has a 140MW power deficit during peak hours as hydro-electric power generation has been reduced due to lower water levels on Lake Victoria.

He explained that further analysis had to be done on the gas to establish its properties, and that gas was a lot easier to process than oil.

“It looks like very good gas but its components have to be studied. With gas, you can process and use it within a year. The infrastructure needed is not as complicated as that of oil. The only complication can be in transportation,” he said.

Tullow Oil became 100% owner and operator of Block 2 after buying out Hardman Resources. It is also 50% owner of Block 3A, while Heritage is owner of the other 50% and project operator. The companies’ activities in Kingfisher exploration well, Block 3A, also in Bunyoro, discovered oil flowing at 14,000 barrels of oil per day.

Nzizi-2 oil well, situated in exploration Block 2, in Kaiso-tonya in Bunyoro was drilled as ‘appraisal well’ to confirm oil accumulations in Waraga, Mputa and Nzizi-1 oil wells.

These were drilled last year and were found to have a cumulative flow of 12,050 barrels of oil per day.

Uganda, which relies mainly on hydro-electric power, has been hit by shortages due to the falling levels of water in Lake Victoria, affecting the economy.-New Vision