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uganda's oil industry hinges on test results, due

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    Uganda's Oil Industry Hinges On Test Results, Due Soon


    Business Day (Johannesburg)

    January 25, 2005
    Posted to the web January 25, 2005

    Michael Wakabi

    UGANDA's oil exploration industry is awaiting key results, expected early next month, from tests on samples from Heritage Oil and Gas's Turaco-3 exploration well.

    The results, which will reveal the composition of oil samples extracted from the 2850m deep well, are expected to determine whether Uganda will have a commercial petroleum production programme in the near future.

    Detailed analysis of the samples has been undertaken in Britain over the past month.

    Heritage Oil says two potential hydrocarbon-bearing zones were found during drilling at Turaco-3. The oil-bearing sequence of sand and shale was spread over a 350m- high band.

    "The flow rates from the test were very good, but the unforeseen presence of carbon dioxide in the gas stream interfered with the programme, so we must now wait approximately one month for the results of the detailed compositional analysis of the pressurised samples before deciding how best to proceed with our evaluation of Turaco," Heritage chairman Micael Gulbenkian said earlier this month.

    The assistant commissioner at Uganda's petroleum exploration and production department, Ernest Rubondo, said the viability of the programme would depend on the extent of carbon dioxide contamination in the sample, and the extent of its distribution in the exploration area, which the tests were trying to determine.

    "The presence of carbon dioxide in small quantities is not necessarily fatal, but the more you have, the worse the prospects."

    Heritage was supposed to have released the results this month, but requested an extension to next month to allow more detailed analysis of the samples.

    The search for domestic sources of oil has taken on a new urgency as global prices for the commodity are expected to continue their upward curve, mainly due to an expected increase in demand by China as its economy goes through rapid expansion during the next decade.

    More than $30m has been invested in exploration in Uganda over the past three years, with three companies actively searching for oil. Heritage Oil and Gas, Tullow Oil, and Hardman Resources are the three companies that have been licensed to explore the Albertine rift, part of which is in the Democratic Republic of Congo.

    Uganda's oil exploration programme has had a troubled history since the presence of oil was first documented in the 1920s. At least three companies have abandoned the search during the past century.

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    The first exploration licence was given by Uganda's colonial administrators to a W Brittlebank in 1913, but he abandoned the project midway. In 1993, Belgium's Petrofina failed to renew its exploration licence three years after it was granted.

    The Uganda General Works and Engineering Company, a Ugandan-American outfit, suffered a similar fate in 1996, just a year after licensing. However, Heritage says "the Albertine rift continues to be highly prospective for hydrocarbons".
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