Heritage Oil to fast-track Uganda oil discoveries

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 23 -- Heritage Oil Corp., Calgary, plans to bring its oil discoveries in the Lake Albert basin in Uganda on stream before 2015, a senior company official said.

The Buffalo-Giraffe complex on Block 1 is considered the largest onshore oil field in sub-Saharan Africa to have been discovered in the last 20 years, said Brian Smith, Heritage Oil's vice-president of exploration (see map, OGJ, Feb. 16, p. 34).

The company is working with partner Tullow Oil Ltd. to put the discovery on a fast track. It said the block holds multibillion bbl of oil potential. "Sufficient oil reserves have been discovered in the Albert basin to exceed the commercial threshold for development," Smith said.

The partners plan to build a 500,000 b/d crude oil export pipeline from Block 1 to Mombasa on Kenya's East Coast. The line's cost is estimated at $1.5-2 billion. Analysis and development studies are under way on that project.

"Land rights are a big issue," said Smith at International Petroleum Week in London. "Uganda is looking at refining solutions—it's very much part of energy policy, and this is looking at a mix of different solutions."

The companies' discoveries followed 12 years of exploration and a relicensing procedure, finding CO2first before hydrocarbons. "The involvement with government is now politically complex, and we have been talking to government about its energy policy and how to develop its resources," Smith said.

Kingfisher field on Block 3A in Lake Albert has light, sweet crude oil, 30-32°, with a low gas-oil ratio and some associated wax. The two wells have been suspended as future producers. Three zones in Kingfisher-2 flowed at 14,364 b/d, and the equivalent zones in Kingfisher-1A flowed at 9,773 b/d.

"Kingfisher could be larger than what we've found so far," Smith said.

Smith added that, on a P90 basis, Buffalo held 111 million boe, Giraffe held 35 million boe, and the Crocodile and Hartebeest structures, also on Block 1, held 16 million boe and 8 million boe respectively. The Giraffe discovery had a gross oil-bearing interval of 89 m, with 38 m of net oil pay.

Offshore drilling is scheduled to start in first-quarter 2010, and the partners are developing specialist technology to carry this out, Smith told OGJ. A mountain rig in modular form would be installed on a barge. "There are logistics of moving a rig into a remote area, and this is in relatively shallow waters," he said.

Both companies are working with barge and drilling contractors and are completing the front-end engineering and design stage.

"There is no guarantee that we will run with either, but we want to evaluate the solutions. There will be a tender at the end of the exercise in the second or third quarter of this year."

Contact Uchenna Izundu at uchennai@pennwell.com.

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