The Financial Times described Farouk Al Kasim as the ‘The Iraqi who saved Norway from oil’.
As a young geologist, Al-Kasim moved to Norway in search of better healthcare for his son in 1968. He was immediately hired by the Norwegian government as a last-ditch effort to ‘find’ oil. Al Kasim is credited for writing the famous ‘white paper’ that guided the organisation and administration of Norway’s young oil industry in the 1970s.
It is not by chance that Norway now holds a $1.5 trillion sovereign wealth fund. This is one of the significant benefits that makes Norway’s oil journey a model of how to translate oil and gas resources into lasting value.
Many oil and gas-rich countries, including Uganda, Ghana, Mozambique are continuously adapting the Norwegian model to their unique needs, to ensure prudent and sustainable management of the resources.
Uganda has been a beneficiary of the Norwegian experience, hence the initial focus on capacity building, developing a stable legal framework and building institutions. One of the key pillars as the Norwegian oil industry evolved was sharing knowledge and expertise with new oil producers.
The story of the Ekofisk field provides lessons for the oil industry, and the importance of partnerships between industry and government. The discovery of Ekofisk in 1969 stimulated exploration on the Norwegian Continental Shelf (NCS) in the North Sea, during a period when many exploration companies were abandoning the NCS after drilling over 200 unsuccessful wildcat wells.
Ekofisk was the first commercial and petroleum-producing field in Norway, that was projected to produce oil for 40 years from the 1970s. This field has been in production for over 50 years, with this attributed to investment in research and application of new technologies for enhanced oil recovery, among other reasons.
The current estimated lifetime of the field was certainly not the expectation in 1969 when the discovery was made, and when production figures plummeted in the early 1980s, with only an initial 20 per cent recovery rate expected.
There was a turn of events when enhanced oil recovery techniques and application of new technologies led to not only a rise in production, but also an increase in reserves of the field.
The amount of oil recovered from Ekofisk has grown through the years and is close to 60 per cent (against a global average of 20 per cent) and the field is now expected to continue producing until 2050.
This continuous improvement in projections has largely been because of investment in data management (and interpretation) together with a level of flexibility in the renewal/ extension of licences.
However. such flexibility requires judiciousness and must not be abused by either party. Uganda’s current resource base is 6.5 billion barrels of oil in place with 1.4 billion barrels of recoverable resources.
This is below the resources of countries such as Saudi Arabia, Venezuela and Canada with hundreds of billions of reserves or the likes of Nigeria, Libya, Qatar and Russia with tens of billions of reserves.
However, Uganda’s resources are still significant and ranked within the same range as countries such as Australia, Chad and United Kingdom, and are making a significant contribution to fast-tracking the country’s economic growth and development.
There is also potential for increasing the recoverability of the fields under the Tilenga and Kingfisher petroleum development projects in Uganda. As the oil companies undertake development activities such as the ongoing drilling of the wells in Uganda, and later begin to produce the fields, a lot more data is collected, analysed, and interpreted.
This, together with investment in research contributes to a better understanding of the oil fields to enable more efficient production. The Norwegian government is implementing a new strategic direction that focuses on carbon capture and storage, and exploration of Seabed minerals.
This is in tandem with government’s strategy to decarbonise all industries and prepare for the energy transition. In addition, Norway has committed to continue producing oil and gas, as long as it is relevant and required for energy security and economic development.
Uganda’s Energy Transition Plan is based on the country’s unique landscape and needs. The oil and gas sector plays a critical role in providing alternative sources of energy, and revenue to invest in developing renewable energy and the required infrastructure.
Uganda’s oil and gas sector is being developed sustainably, with a focus on prudent environment management, harnessing the linkages with other sectors, promoting the application of the best available technology, contributing to energy security, and enhancing participation of Ugandans.
corporateaffairs@pau.go.ug
The author is the manager, Corporate Affairs, Petroleum Authority of Uganda.