Uganda expects to begin producing oil in 2022, its energy minister Irene Muloni said on Feb. 13, indicating a slight delay from the east African country’s revised target of 2021.
Uganda discovered crude reserves more than 10 years ago but production has been repeatedly delayed by disagreements with field operators over taxes and development strategy.
A lack of infrastructure such as a transportation pipeline and a refining facility have also held up output.
“Production we are now looking at by 2022, our first production, from Kingfisher and Tilenga blocks,” Irene Muloni told Reuters on the sidelines of the Petrotech conference.
China’s CNOOC and France’s Total and London-based Tullow Oil have the stakes in the two areas. CNOOC is the operator of Kingfisher area while Total leads the development of Tilenga.
“We are preparing for production. We have to build a pipeline for exports and a refinery to add value. So unless those two projects are done we can't start producing,” she said.
In April last year Uganda signed a deal with a consortium, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day (bbl/d) refinery that will cost between $3 billion and $4 billion. The refinery is expected to be operational by 2023.
Muloni said land-locked Uganda, which imports refined fuel, would announce its next exploration licensing round in May.
A final investment decision for the refinery will be taken by September 2020 and the project is expected to be completed in three years time, she said.
A crude export pipeline, which passes through Uganda’s neighbor Tanzania, with a capacity to transport 260,000 bbl/d oil will be built by2022, Muloni added.
Emmanuel Simon Gilbert, head of downstream operations at Tanzania Development Corp., said Tanzania expects to take a 15 to 25% stake in the planned 1,500 km (932 miles) pipeline, which he said was estimated to cost around $3.5 billion.
Uganda will also take a stake in the pipeline project with the majority share being held by Total, he said, adding that the inter-governmental agreement between the two nation has to be signed before moving to a next stage.
“Ugandan oil is heavy and you need to install heaters along the way at 4 or 5 different locations ... So it is a bit challenging,” he said of the planned pipeline.
Recommended Reading
Rhino Taps Halliburton for Namibia Well Work
2024-04-24 - Halliburton’s deepwater integrated multi-well construction contract for a block in the Orange Basin starts later this year.
Halliburton’s Low-key M&A Strategy Remains Unchanged
2024-04-23 - Halliburton CEO Jeff Miller says expected organic growth generates more shareholder value than following consolidation trends, such as chief rival SLB’s plans to buy ChampionX.
Deepwater Roundup 2024: Americas
2024-04-23 - The final part of Hart Energy E&P’s Deepwater Roundup focuses on projects coming online in the Americas from 2023 until the end of the decade.
Ohio Utica’s Ascent Resources Credit Rep Rises on Production, Cash Flow
2024-04-23 - Ascent Resources received a positive outlook from Fitch Ratings as the company has grown into Ohio’s No. 1 gas and No. 2 Utica oil producer, according to state data.
E&P Highlights: April 22, 2024
2024-04-22 - Here’s a roundup of the latest E&P headlines, including a standardization MoU and new contract awards.