Uganda Oil Find.

In a vast western Ugandan plane stretching for several dozen miles up to the shores of lake Albert in Hoima, a number of newly-opened roads crisscross each other, leading to four exploration wells which in late 2006 had been officially confirmed to have commercial oil deposits. The roads and others still under construction, marked by numerous mini-bridges built over the countless streams, have suddenly opened up this isolated part of Uganda to a new life. But these earth roads are also foreshadowing the enormous logistical difficulties which the oil extraction industry will encounter there when commercial production begins and the scale of operations expands.

More than 60 km of roads have been built by Heritage Oil and Gas and Hardman Resources, the two firms which have registered tremendous progress in their bid to exploit petroleum deposits in Western Uganda. Yet, while that work was estimated to have cost about $1m, it seems only a tiny fraction of what is needed to get even a fairly reliable road infrastructure to support full-scale oil production about to unfold in the area. Heritage's Uganda Country Manager Bryan Westwood on Jan. 2 was quoted as saying said the company had budgeted about $ 500,000 for maintenance work on the worst sections of the existing roads. This was in addition to more than $200,000 the company had spent on the road to Mbegu camp in Kaiso-Tonya area (Buseruka sub-county), a transit point for all of the company's supplies destined for the drilling on Kingfisher well in Buhuka area, 80 km West of Hoima town. He was non-committal on whether Heritage would upgrade these roads if they broke down, saying: "Any future planning will depend on the government planning, after all we are here to explore for oil not as road contractors."

At the Buhuka camp (Kyangwali sub-county), drilling on Kingfisher-1A well was in early 2007 progressing full throttle. Jurgens Bence, overseeing operations at the well, said flow testing was anticipated around February, adding: "We can't be precise because basically we can't know when we'll reach our desired depth". Kingfisher-1A well, located in exploration area 3B, was deviated from Kingfisher-1 when the drilling unexpectedly encountered a hard rock before reaching the target depth of 4,000 metres. A decision was made to bypass the rock by drilling a sidetrack, with the company emboldened by the discovery at Kingfisher-1 well which, during flow testing, showed a 4,000 b/d capacity. Robert Tugume, the principal geophysicist with the Department of Oil Exploration and Production, was on Jan. 2 quoted as saying: "We believe that there're more oil traps deep there and that is why it was determined that further drilling be done".

Heritage's stakes on the two Kingfisher wells are particularly so high: it is the first place where they have discovered oil, after years of frustrating exploration. In Semliki Basin, in exploration area 3A where work began in 1997, the field turned up a disappointing result after spending nearly $50m. Oil was discovered but was found to contain high concentrations of carbon dioxide. Then in January 2006, Hardman Resources, a latecomer to the exploration business, quickly reported the first find of viable oil deposits at Waraga-1 well in Kaiso Tonya. Combined, Hardman's three wells-Waraga 1, Mputa 1 Mputa 2, which have been flow tested and indicated commercial oil deposits, can produce more than 12,000 b/d.

The number of oilmen working on various exploration wells is modest. But their economic power is starting to register on the locals. In preparing for a bonanza along the lakeshore, dotted with impoverished fishing villages, the company has started low-level involvement of the locals in the spin-off economic activities. Some of the jobs currently available for the locals include planting and maintenance of trees, earthworks, store keeping and laundry services. Some of the food supplies to the camp, with an average of about 100 people, are sourced locally.

Two bore holes for instance have been dug at Mbegu and Bugoma providing clean water for people. The roads which have been built have also had an instant economic impact. Heritage's field doctors step in when a life threatening case strikes in any of the surrounding villages. Talk of building a health centre was circulating in early 2007. A survey is being conducted by Hardman around the fishing villages to establish how they can be helped to start sustainable, income generating projects like honey production. The motivation is borne of a desire to generate as much local goodwill as possible early enough and to eschew the potential civil unrest which is common in communities where oil has been discovered in other Sub-Saharan African countries.