Sam Jumbwike

Sam Jumbwike

West Africa Operations Facilitating Tullow’s Strong Progress

In a Trading Update for the period raning from 1 January to 25 April 2018 released on Wednesday, British oil firm Tullow Oil reported that it is experiencing a strong progress in 2018 and continues to generate free cash flow.

This positive progress is largely facilitated by their operations in West Africa, specifically in Ghana where drilling programme at the TEN and Jubilee fields ‘are underway’ and will ‘remain on track to deliver on our existing production guidance,’

An optimistic Paul McDade, Chief Executive Officer, Tullow Oil, said their Ugandan and Kenyan developments are on track with a Final Investment Decisions expected this year and another in Kenya next year.

“We are preparing for the start of our multi-year exploration programme across our diverse portfolio of exploration prospects in Africa and South America,” McDade said.

Adding: “The progress we have made is due to the hard work and financial discipline of the team and the support of our shareholders, allowing us to focus on growing our business and delivering returns.'

The Tullow Group which is holding its Annual General Meeting (AGM) in London is expected to announce its Trading Statement and Operational Update on 27 June 2018 and Half Year Results will be announced on 25 July 2018.

Highlights from trading update

  • Strong production at TEN in Ghana and across our non-operated portfolio delivered average first quarter net oil production of 87,700 bopd, including production-equivalent insurance payments. Full year guidance remains 82,000-90,000 bopd
  • Drilling of first new production well on the Ntomme field in TEN is under way; contracting of second rig is under review; first shut-down to stabilise turret bearing at Jubilee FPSO completed successfully
  • Progress towards Final Investment Decision (FID) in Kenya in 2019 continues; upstream and pipeline Front End Engineering Design (FEED) and Environmental Social Impact Assessment (ESIA) work progressing to plan
  • Uganda farm-down to Total and CNOOC awaiting Government approval; Lake Albert development progressing towards FID in the second half of 2018
  • Exploration team continues to mature prospect inventory and drill queue for three-year exploration programme, which will start with the drilling of the Cormorant wildcat well, offshore Namibia, in the third quarter of 2018
  • Successful issue of $800 million of senior notes due 2025 further extending debt maturities; voluntary cancellation of $150 million of commitments under the Revolving Corporate Facility (RCF), further optimising balance sheet
  • Net debt reduced to $3.4 billion at 31 March 2018; current headroom and free cash of approximately $1 billion
  • 2018 capex forecast of $460 million remains unchanged; Uganda expenditure of $110 million expected to be repaid following completion of Uganda farm-down

Chinese University To Start Oil Institute At Makerere

China University of Petroleum (CUP) signed a Memorandum of Understanding (MoU) with Makerere University that will lead to the establishment of an oil institute at the college of natural sciences, New Vision, a local newspaper reported last week.

Barnabas Nawangwe, according to the newspaper, said the MoU was signed in December and that implementation of areas of collaboration has started. “The MoU will see the two universities mobilise funds to start the petroleum institute,” Nawangwe said.

Nawangwe made the remarks while meeting a delegation of seven officials from CUP on Thursday. He said the financial details of the MoU will come out at a later stage. The universities will also collaborate in the areas of staff and student exchange; joint research and organising conference activities, he added.

Is Government Failing To Manage Ugandans’ Expectations From The Oil Resource?

Two years after announcing the discovery of commercial Oil Reserves in Uganda in 2006, the Government of Uganda came up with the National Oil and Gas Policy of 2008 through which it sought to utilize the newly found Oil resources to contribute to early achievement of poverty eradication and create lasting value to society.  

Oil raised the expectations of so many Ugandans as they started envisioning the petro-dollars that would flow into the country to fix the financial gaps that the country had been grappling with for generations.  Government’s remedy for managing these expectations was to have constructive dialogue with all the stakeholders in order to reduce anxieties arising from the expectations.

Ten years down the road, more oil deposits have been discovered and the recoverable oil now stands 1.5 billion barrels. Giant Oil Companies like Total, CNOOC and Tullow Oil entered into Uganda and have made huge investments in Uganda’s Oil Sector. Government has already reaped around USD $ 300,000 from Signature Bonuses and millions of dollars from taxes arising out of Tullow’s acquisition of Heritage’s interests in Uganda, and Tullow Oil’s farm down to CNOOC and Total.

Government’s potential share of the oil resource after oil companies have recouped their costs stands at a whopping US $50 billion and Government has already indicated it to Ugandans that Uganda will reach the Middle Income Status in the next decade.

However, from public opinions, Ugandans’ expectations from the Oil seem to be dwindling every other passing day.  A decade after discovery, the oil is yet to be drilled from the ground, the Oil refinery has not yet been set up and the pipeline to transport the crude oil is yet to be built. Earthfind’s Sam Jumbwike engaged a number of Ugandans about and they shared about their expectations from the Oil.

Mariat Nasasira-Radio Presenter, Galaxy FM


The truth is that I stopped expecting anything from this Government. I have zero hope in our Oil. Under different circumstances or different Government I would expect to see an improvement in infrastructure, better roads and hospitals, more jobs, reduced fuel prices and gas prices for those of us who use it to cook. And of course a reduction in the country's dependence on foreign donors. Unfortunately with the kind of corruption and poor governance in place, that seems like just a dream.

Maureen Kyalya Waluube- Former Presidential Candidate 2016

I expect nothing from the Oil as long as we still have NRM in Uganda. All profits are going to build Rwanda not Uganda

Fred Musisi Munagomba- Director, Creative Options


Actually, I don’t expect anything good to come out of the Oil resource because I don't trust the leadership. The oil money will be stolen and nobody will be apprehended.

Mutebe Henry-Ugandan Student in Norway

I want to be optimistic. I am hopeful that the oil money will change fortunes for Ugandans but this can only be achieved by more increased transparency, accountability and sound investment of the oil money. Countries that have done well like Norway invest about 60% of their oil money into equities in well developed markets like the US, UK/euro area, Germany, Japan among others. I would be very proud if our country had shares in companies like Apple, Microsoft and Nestle.


INTERVIEW: We Need More Engagements With Government - Petroleum Students

Anita Badagawa is a final year student of Petroleum Geosciences and Production at Makerere University. She currently represents the petroleum students as the President of the Makerere University (MUK) Society of Petroleum Engineers Student Chapter. She shared with EarthfindsSam Jumbwike their dream for the Oil and Gas Sector in Uganda

Tell more about the Makerere University Society of Petroleum Engineers/Students Chapter. How did it come about?

Society of Petroleum Engineers (SPE) MUK Student Chapter was basically created under the SPE Uganda Section to extend the arms and influence of the Society of Petroleum Engineers International (SPEI) in Petroleum Institute. The SPEI consists of 168, 000 members in 144 countries and about 368 Student Chapters worldwide. SPE membership includes more than 68, 000 student members.

Our Mission is to collect, disseminate, exchange technical knowledge concerning the exploration, development and production of Oil and Gas resources and related technologies for public benefit to both Students and Professionals.

On top of the above, the SPE Makerere Student Chapter aims to develop professional awareness among members and other Students doing degrees that are relevant to the Oil and Gas sector. We promote social and academic interaction among Geosciences and Engineering and promote unity among all engineering disciplines in conjunction with Geosciences Students’ Societies.

As of now, what are some of the things that you have undertaken as an association to fulfill your objectives?

We have organized recruitment drives to enroll more student members. We have had collaborative projects with Makerere Engineering Society, held distinguished lectures from Petroleum Engineering Professionals, built models for study purposes, sensitized people, undertaken trips to attend conferences on Oil and Gas in leading Oil Companies across the globe, and we recently organized the Oil and Gas forum that took place at Protea Hotel.

Petroleum Geosciences and Production is relatively new in Uganda. Where did your lecturers come from?

Yes it is true it is a new course, however we have had the Geology Department for a longer time and since half of our curriculum as petroleum students consists of geology related course units, lecturers to handle that were available.  

Now for the rest of the curriculum, we have had visiting lecturers of Petroleum Engineering from Oil Companies like Total, CNOOC, Tullow Oil Uganda and also government technocrats from the Directorate of Petroleum at the Ministry of Energy and Mineral Development.

Can you sum up what Petroleum Students at MUK are taught for the entire course?

Throughout the course we study Petroleum Engineering, Drilling Engineering, Health and Safety, Reservoir Engineering, Geology, Drilling Fluids and Geo-Physics among others.

What are some of the challenges that you face as Petroleum Students?

There is inadequate exposure while undertaking the course mostly due to lack of instrumentation and equipment in laboratories. For instance we study quite a number of things that require hands on exposure and experience; however it is nearer to impossible to have an opportunity to learn with practice.

The software to work with is inadequate. Most of the data we deal with has to be worked on using licensed software that is only available in big Oil Companies abroad and rare to find here. There is also less communication from government concerning the Oil Sector.

Is this having an effect on your competitiveness?

Yes it is. There are few Petroleum Engineers that have studied in Uganda that can actually compete with the ones that have studied for example at Heriot Watt University. This is affecting us in that most of the operating companies are hiring expatriates to do the engineering work available.

We are not having enough practice to be in position to compete with the expatriates that are being brought into the country to do the engineering works in the Oil and Gas operations.

What advice do you have for government if we are to do better?

Government must beef up local capacity in the Oil and Gas Sector. All Oil and Gas Faculties at Universities and Institutes in Uganda should be furnished with efficient laboratories and enough equipment like Microscopes for Christolographical studies, Thin Sectioning Equipment, and Geo-Physical Equipment.

Also Oil and Gas Students should have enough study trips and be availed with the best Lecturers in the Petroleum Industry. The 6.5 billion barrels of Oil in place with about 1.5 billion barrels recoverable is good news to the economy of Uganda.

The revenues from the Oil industry will boost development in almost all the other sectors and this will place Uganda at a better chance of becoming a middle income country. The current Oil and Gas Regulations are good; they just need a lot more professional people to implement them in order to enable sustainable Management of Uganda’s Oil Resource.

From what we have studied, we have a lot to offer to our country in terms of building the Oil and Gas industry through proper regulations, good policy, good management to ensure that the Oil Resource is not misused in order to avoid the Oil Curse and above all ensuring that the Oil will benefit every Ugandan.

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