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History and Development of Oil & Gas in Uganda

The hunt for oil in Uganda dates back to the early 1920s, when a British geologist named E.J. Wayland documented the presence of hydrocarbons in the Albertine Graben. This initial discovery was followed by preliminary well-drilling in 1938, but was halted in the wake of World War II and its aftermath. (The most that was done in the 1940s and 50s was the drilling of a few shallow wells for stratographic purposes.) In the years following independence, the political turmoil that engulfed Uganda rendered the pursuit of oil dormant until the 1980s, when the country acquired aeromagnetic data across the entire Graben region. The aeromagnetic surveys, which were taken between 1983 and 1992, produced a ray of hope. They identified five sedimentary basins in the country, not only in the Albertine Graben, but also in Lake Kyoga, Hoima, Lake Wamala, and Moroto-Kadam. Geologists in Uganda’s Petroleum Exploration and Production Department engaged in extensive subsequent ground surveys, which revealed the Albertine Graben as the basin most primed for oil exploitation.

The Albertine Graben is located in western Uganda, covering the districts of Masindi, Kibale, and Hoima. The Graben, which forms the northernmost part of the western arm of the East African Rift Valley, is situated along the Ugandan-Congolese border, and stretches northward to Uganda’s border with South Sudan.

Over the past decade, the Ugandan government has signed contracts with a number of international companies to engage in preliminary exploration and testing. The most visible of these firms is Tullow Oil, which recently consolidated its hold over a handful of oil-rich concessionary blocks in the Graben. In March 2011, Tullow signed contracts with Total S.A. of France and CNOOC Ltd. of China, each of which acquired a one-third interest in exploration areas 1, 2, and 3A. While oil production is still a couple years away, at peak capacity the combined areas are expected to produce approximately 200,000 barrels of oil per day. Among the more lucrative oil fields in the Graben are the Maputa and Waraga, which have an estimated 100 to 400 million barrels of oil, the Giraffe 1, which contain at least 400 million barrels, and the Kingfisher in Hoima, which has approximately 500 million barrels of oil.

The Legal, Administrative and Policy Framework on Oil and Gas in Uganda
1. The Constitution of Uganda (1995)

Article 244 of the 1995 Constitution provides that parliament shall enact laws regulating the exploitation and development of minerals, and that such exploitation shall take into account the interests of individual land owners, local governments, and the central government. The constitution further states that all minerals are held by the government on behalf of the people of Uganda.

2. Petroleum Laws and Policies

In January 2008, the Uganda government approved the country’s National Oil and Gas Policy. This document was intended to provide guidelines on the development of Uganda’s emerging oil and gas industry following the discovery of commercial prospects. The policy was designed to provide a roadmap for future petroleum legislation, while accounting for the various acts and regulations that provide the legal framework for the development and exploitation of oil and gas. In 2010, the Ugandan Parliament tabled the Petroleum (Exploration, Development, Production and Value Addition) Bill, 2010, which, once passed, will provide the principal legal framework governing the oil and gas sector. ACODE, in partnership with the Civil Society Coalition on Oil in Uganda, published a research paper critiquing the initial draft of the bill. See;

3. Environmental Laws and Policies

The National Environment Management Authority (NEMA) is a semi-autonomous institution, established in 1995 under the National Environment Act CAP 153 as the principal agency in Uganda charged with the responsibility of coordinating, monitoring, regulating, and supervising environmental management in the country. NEMA advises various government agencies on environmental issues, and spearheads the development of environmental policies, laws, regulations, standards, and guidelines. Uganda has numerous laws designed to protect the environment. Among the more central legislations includes the following:

Regulatory Bodies

The promotion and regulation of the oil and gas sector was initially undertaken by the Ministry of Energy and Mineral Development through the Petroleum Exploration and Production Department (PEPD). Under the National Oil and Gas Policy, the Ministry will handle the policy aspects, while regulatory and commercial aspects will be handled by Petroleum Authority of Uganda (PAU) and the Uganda National Oil Company, respectively.