The Minister of Energy and Mineral Development Hon. Ruth Nankabirwa, has announced that the commencement of development drilling of Uganda’s oil is expected to commence in the first quarter of 2023. This speaks to the target of having Uganda’s first oil by 2025.
The development and production of the country’s discovered oil and gas resources is being undertaken by the Tilenga and Kingfisher projects under the supervision of the Petroleum Authority of Uganda (PAU) -which is also run under the Ministry of Energy .
The Tilenga project will be expected to have a peak production of 190,000 barrels per day, whereas the Kingfisher field will have a plateau of 40,000 barrels per day at First Oil.
Hon. Nankabirwa made these remarks during an annual media briefing, which focused on the milestones achieved in Uganda’s Oil and Gas sector during 2022 and the outlook for 2023. The Minister was accompanied by officials from the Petroleum Authority of Uganda (PAU) and the Uganda National Oil Company (UNOC).
According to the Minister, the Kingfisher fields which will be officially commissioned by the President of Uganda H. E. Yoweri Museveni in January 2023 have the capacity to produce oil and gas resources from 20 wells, with 11 water injection wells to maintain pressure to support production.
The Tilenga project which covers parts of the Buliisa and Nwoya districts, North and South of the Victoria Nile will be undertaken through onshore drilling from 31 well pads with three drilling rigs.
“Efforts have been made towards completing the first well pad to be drilled (JBR-5) in time for the expected spudding of the first Tilenga development well at the end of Quarter 1, 2023,” she said adding that one of the three rigs required to drill the 426 wells for the Tilenga Project arrived in Mombasa in October 2022.
Nankabirwa told journalists that the contractors of the Tilenga project are assembling, testing, and calibrating some of the equipment delivered on-site in preparation for the commencement of development drilling expected to start in the first quarter of 2023.
In regards to commercialization of the country’s oil and gas resources, the EACOP project is taking lead to provide Uganda’s crude oil access to the international market while the Uganda Refinery Project will have the first call on crude oil.
“The EACOP will be a transboundary pipeline consisting of a 30 meters wide corridor totaling to 1,443kms starting at Kabaale in Hoima stretching to Chongoleani in Tanga Tanzania. Construction of the EACOP has commenced in Tanzanian section and in Uganda its expected this year,” she said.
The minister added that the Uganda Refinery Project whose Final Investment Decision (FID) is expected to be concluded this year will include the construction of a 213-kilometre refined products pipeline from Hoima to Namwabula-Mpigi.
The Government of Uganda has taken caution to ensure that oil and gas operations in the country are undertaken safely and in a way that does not harm people and the environment. This was evident through the launching of the National Oil Spill Contingency Plan (NOSCP) in March 2022 by the Rt. Hon. Prime Minister, Robinah Nabbanja.
“The NOSCP is a national framework and command structure for planning, preparation, and response to oil spills. It requires local governments and lead agencies to develop oil spill contingency plans regulated by the Petroleum Authority of Uganda.”
Furthermore, Nankabirwa explained that oil treatment during production generates associated gas that will be first utilized to satisfy the requirements for the facilities, such as heating, and power requirements, for the normal oil production activities as a priority.
“The Tilenga, Kingfisher and Refinery projects are projected to produce about 330,000 tonnes per year of LPG at peak. The recovered LPG will be used to meet local and regional demand. This aligns well with the Energy Transition plan for the country, which seeks to minimize the usage of biomass to address the challenges of deforestation and climate change,” she noted.
Additionally, the Minister stated that the Oil and Gas Sector is cascaded with opportunities at different levels or tiers, providing more opportunities for Ugandans and Ugandan enterprises among which include; employment, provision of goods and services, capacity building, enterprise development, and transfer of knowledge and technology.
The Minister emphasized that foreign companies awarded contracts at Tier-1 and Tier-2 levels are expected to sub-contract more to Ugandan companies at the lower contracting levels. This is expected to increase the participation of Ugandan entities in the sector towards the targeted 40 per cent participation.
The Petroleum Authority of Uganda (PAU) uses the National Supplier Database (NSD) to monitor the utilization of Ugandan goods and services in the sector. According to Mr. Ernest Rubondo, the Executive Director PAU, only companies registered on the NSD are eligible to supply goods and services to the industry.
“Since establishment of NSD in 2017, 2,350 have been qualified and registered on the platform, up from 513 in 2017. Of these, 1,827 are Ugandan entities, while 523 are foreign companies,” Rubondo said further calling upon the media to use their platforms to disseminate information about the available opportunities in the oil and gas sector.
By November 2022, 6,233 people were employed within the sector, of which 5,875, representing 94 per cent, were Ugandans. The Licensees directly employed 506 people, 70 per cent of whom are Ugandans, while their contractors and subcontractors employed 5,647 people, 97 per cent of whom are Ugandans.
