OIL EXPLORATION: A RIG, A REWARD?
Maverick exploration company Heritage Oil & Gas will know within eight weeks
whether its US$21m investment in oil exploration in Uganda's section of the
Rift Valley has paid off.
The company is in an equal partnership in the project with JSE-listed Energy
Africa.
Project manager Bryan Westwood calls this a world-class find. "If we've read
our seismic right, this could be one of the biggest oil fields in Africa -
on par with Kuwait."
Energy Africa COO Adrian Nel is more cautious but confirms that previous
explorations in Uganda produced good results. Apart from the Heritage site,
Nel says, Energy Africa is involved in a joint exploration project with
Australian resources group Hardman further north along the shores of Lake
Albert.
Last week Heritage's new rig for drilling in a test well in western Ugan da's
Semliki Valley, 10 km from the Congolese border, arrived in the Kenyan port
of Mombasa.
It is scheduled to be shipped to the site by August 21 and Westwood hopes to
have drilling results by the end of September.
Executives at Heritage are optimistic. The company's four-year-long seismic
mapping of the site delivered strong results and suggests there may be
around a billion barrels waiting to be tapped.
But Heritage stresses that such mappings are scarcely an exact science.
"Seismic readings can be interpreted in different ways," explains Westwood.
"All our geologists have so far agreed on this one. But until we drill it,
we've got nothing."
The company began tentative drilling in 2002, but found that its rig would
not go deep enough. Heritage's engineers believe the new rig should be able
to access the oil and determine its quality. If the oil turns out to be
high-grade the company may consider building a pipeline to Mombasa.
The Rift Valley project is Heritage's biggest by far. A British-Canadian
company, run from London and listed in Toronto, Heritage is dwarfed by the
industry's household names. Its comparative advantage lies in its
willingness to take risks.
"No-one has ever done investigations here," says Westwood. "This is new
territory and the bigger companies aren't willing to bet on it. Of course,
if we're right we'll be in a strong position to sell to one of the
production giants."
Neither is the company shy of risks associated with political instability in
this volatile part of the world. When it started exploration in late 1998,
western Uganda was under attack by the Allied Democratic Forces (ADF)
insurgent group.
"We nearly had a staff walkout after the ADF attacked a technical college
down the road," recalls Westwood, "but we've got good security ."
The company's security is partly managed by agents from the defunct SA
mercenary company Executive Outcomes. "You only have problems if you're a
soft target," says Westwood. "I think we have managed to make it clear that
we're not."
Source: www.fm.co.za
Maverick exploration company Heritage Oil & Gas will know within eight weeks
whether its US$21m investment in oil exploration in Uganda's section of the
Rift Valley has paid off.
The company is in an equal partnership in the project with JSE-listed Energy
Africa.
Project manager Bryan Westwood calls this a world-class find. "If we've read
our seismic right, this could be one of the biggest oil fields in Africa -
on par with Kuwait."
Energy Africa COO Adrian Nel is more cautious but confirms that previous
explorations in Uganda produced good results. Apart from the Heritage site,
Nel says, Energy Africa is involved in a joint exploration project with
Australian resources group Hardman further north along the shores of Lake
Albert.
Last week Heritage's new rig for drilling in a test well in western Ugan da's
Semliki Valley, 10 km from the Congolese border, arrived in the Kenyan port
of Mombasa.
It is scheduled to be shipped to the site by August 21 and Westwood hopes to
have drilling results by the end of September.
Executives at Heritage are optimistic. The company's four-year-long seismic
mapping of the site delivered strong results and suggests there may be
around a billion barrels waiting to be tapped.
But Heritage stresses that such mappings are scarcely an exact science.
"Seismic readings can be interpreted in different ways," explains Westwood.
"All our geologists have so far agreed on this one. But until we drill it,
we've got nothing."
The company began tentative drilling in 2002, but found that its rig would
not go deep enough. Heritage's engineers believe the new rig should be able
to access the oil and determine its quality. If the oil turns out to be
high-grade the company may consider building a pipeline to Mombasa.
The Rift Valley project is Heritage's biggest by far. A British-Canadian
company, run from London and listed in Toronto, Heritage is dwarfed by the
industry's household names. Its comparative advantage lies in its
willingness to take risks.
"No-one has ever done investigations here," says Westwood. "This is new
territory and the bigger companies aren't willing to bet on it. Of course,
if we're right we'll be in a strong position to sell to one of the
production giants."
Neither is the company shy of risks associated with political instability in
this volatile part of the world. When it started exploration in late 1998,
western Uganda was under attack by the Allied Democratic Forces (ADF)
insurgent group.
"We nearly had a staff walkout after the ADF attacked a technical college
down the road," recalls Westwood, "but we've got good security ."
The company's security is partly managed by agents from the defunct SA
mercenary company Executive Outcomes. "You only have problems if you're a
soft target," says Westwood. "I think we have managed to make it clear that
we're not."
Source: www.fm.co.za
Gook
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