UGANDA ON COURSE TO GET ITS FIRST OIL OUT OF THE GROUND IN 2025 AS MINISTER NANKABIRWA GIVES UPDATES ABOUT THE ENERGY SECTOR

By Sierra Ruth Arinaitwe

The Minister of Energy and Mineral Development Hon. Ruth Nankabirwa Ssentamu has reassured the country that the oil and gas sector is making good strides towards Uganda getting its first oil out of the ground in 2025.

Nankabirwa made the remarks at the Ministry  head office in Kampala during a -quarterly press briefing -which focused on Sustainable Development of Petroleum Resources Programme under National Development Plan III whose goal is “To attain equitable value from the petroleum resources and spur economic development in a timely and sustainable manner.”

Uganda first discovered its commercial oil and gas reserves in 2006 and over the past 15 years, efforts, including exploration activities and the licensing of reputable international oil companies, have been undertaken to ensure the production and commercialization of the resources. 

The most recent discovery is the possible presence of a working petroleum system in the Moroto-Kadam basin demonstrated by the encountered oil seep and potential source rocks during geological mapping and geophysical surveys (G&G) by the Ministry’s Directorate of Petroleum, the Minister noted.

Nakankabirwa said that the ministry is working  on a number of projects in the petroleum sector  which include the Tilenga Project being operated by Total Energies E&P Uganda, the Kingfisher Development Area (KFDA) Project operated by CNOOC Uganda Limited and the East African Crude Oil Pipeline (EACOP).

 According to the Nankabirwa, the Tilenga Project includes putting up a Central Processing Facility (CPF) to support petroleum production from six oil fields located in Buliisa and Nwoya districts. Project works already commenced, following the signing of the key oil agreements in April 2021.

“The Central Processing Facility will have the capacity to process 190,000 barrels per day, 426 wells to be drilled on 31 well-pads, over 170km of buried flow lines, and a 96km feeder pipeline to the Kabaale delivery point,” she said.

“The Kingfisher Development Area (KFDA) Project situated in Kikuube and Hoima districts will also include developing a CPF to process 40,000 barrels per day from 31 wells to be drilled on four well pads. It has over 18km of buried flow lines, a 46km feeder pipeline from the CPF in Buhuka to the Kabaale delivery point, “ Nankabirwa added.

In regard to the East African Crude Oil Pipeline (EACOP), Nankabirwa re-echoed the need to enact supporting laws and bills by the stakeholders to enable swift progress of Uganda’s enormous opportunities along the value chain .

“The Implementation of the EACOP Project still requires to have in place an enabling law in Uganda, and it is the reason that the government tabled the EACOP (Special Provisions) Bill, 2021, currently before Parliament. Government stakeholders have already interfaced with the Environment and Natural Resources Committee of Parliament over the Bill, and we are optimistic that the bill will soon be passed into law.”

The minister further stated that government has tabled in Parliament -the Public Finance Management (Amendment) Bill, 2021, to enable UNOC to fulfil its legal and commercial obligations. This law will allow UNOC to pay crude oil transportation tariffs and cash calls in the upstream and the Income Tax (Amendment) Bill, 2021, will also enable the government to levy a windfall tax on the excess profit made by the International Oil Companies (IOCs) regarding Exploration Areas 1, 2 & 3A.”

About the oil refining, Minister Nankabirwa confirmed that government is currently acquiring land for the 213 km pipeline from the refinery in Hoima to a storage and distribution terminal in Namwabula, Mpigi. “In 2018, the Government entered into a Project Framework Agreement (PFA) with the Albertine Graben Refinery Consortium (AGRC) to develop a 60,000 barrels per day Oil Refinery. Implementation of the project has significantly progressed, and so far, the Final configuration and Front-End Engineering Design (FEED) have been completed,” she  said.

Nankabirwa explained that in order to ensure environment safety, the government has worked on the National Oil Spill Contingency Plan (NOSCP) through the respective Ministries, Departments and Agencies (MDAs) to put in place measures to safe guard against  catastrophic oil spills.

The plan  expected to be launched  soon is being spearheaded by the Office of the Prime Minister (OPM) and includes various MDAs. The MDAs include the National Environment Management Authority and Uganda’s Petroleum Authority as the designated national authority.

Security of supply of refined petroleum products

 “Given the Government’s lag to adjust prices due to fluctuating global prices, the country experienced regular shortages of petroleum products. While the country is still a net importer of refined petroleum products, the interplay in the forces of demand and supply in the deregulated sub-sector continues to deliver excellent and reliable products at fair prices, “she stated.

The minister however noted that diversification of import routes will enhance the subsector’s competitiveness once the nearly completed development of a transportation system of refined petroleum products over Lake Victoria is commissioned.

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