Energy Minister Nankabirwa insists first Ugandan oil to flow in 2025

Ugandans have waited for the first oil to flow out of the Albertine graben with a lot of excitement after it was announced that the country is endowed with about 6.5 billion barrels of proven reserves with at least 1.4 billion of this readily recoverable.

Two commercial oil development areas- Kingfisher well in Kikuube District and Tilenga in Buliisa District are being operated by two multinationals in preparation for the production of oil and gas. Kingfisher is being developed by the China National Offshore Oil Corporation (CNOOC) with an expected production of at least 40,000 barrels of oil per day at its peak while the second project area at Tilenga is operated by France’s TotalEnergies.

With President Yoweri Museveni insisting that much of the proceeds from the Oil and Gas will be invested in infrastructure development, Ugandans are keen not to wait any longer with the current situation across the country where the roads and bridges are in bad state while electricity connection is still not to expected realities. The government has secured loans to work on the critical oil roads across the Bunyoro-Sub-region while the construction of the Kabalega International Airport in Hoima District is near completion.

In a statement to Parliament on Wednesday, Energy and Mineral Development Minister, Ruth Nankabirwa said that preparations for the oil production are moving according to plan after the President launched the drilling of development and production wells at Kingfisher field in January 2023.

“Development and production drilling for the Tilenga project also commenced in June 2023. A total of 11 wells have been drilled, 8 in the Tilenga and 3 in the Kingfisher area. These wells are being drilled using three rigs in the Tilenga project and one rig in the Kingfisher project” the Minister told Parliament.

Nankabirwa re-echoed her earlier declaration that the first oil will flow in 2025 this time putting a deadline of December of that year which is close to two years from now.

“Government and its partners are working tirelessly and I am happy to report that we are on track to have the first oil by end of 2025” she added.

The Minister who was presenting a statement to update Parliament on the status of the Oil and Gas projects revealed that with the country expected to produce 230000 barrels of per day for five years, there is need for 457 wells and 35 well pads.

She said that construction of the Central Processing Facilities both at the Kingfisher and Tilenga is ongoing and on schedule to be ready by June 2025.

“The Tilenga’s 190,000 barrels of oil per day capacity Central Processing facility which is under construction is currently 33 percent complete while the Kingfishers 40000 barrels of oil per day capacity Central Processing facility is currently 12 percent complete. The laying of interconnecting pipelines of the Kingfisher feeder pipelines to the export hub has already commenced” Nankabirwa revealed.

Reporting on the issue of gas production which is one of the country’s needs to end the consumption of firewood and charcoal for domestic cooking, Nankabirwa informed Parliament that there is hope for reduction on deforestation when the production of 20 kilo ton of Liquefied Petroleum Gas per year commences in the two project areas.

Future prospects

The discovery of oil and gas in the country is work in progress because the government continues to license companies to explore more areas across the country. Currently the Ministry of Energy and Mineral Development is currently working with Uganda National Oil Company (UNOC) and DGR Global to carry out exploration on the Turaco block. The Turaco block is also another stretch along the Albertine graben along the border with the Democratic Republic of Congo (DRC).

The government signed the oil exploration deal with DGR Global to explore around the Turaco Block in May 2023.

Further explorations will be carried out in the Moroto (Karamoja), Kyoga and Hoima basins with hope that more oil reserves are discovered in these parts of the country.

Pipeline project

Nankabirwa also informed Parliament that Uganda, Tanzania and their partners are on course for the construction of the East African Crude Oil Pipeline (EACOP) that is expected to snake through about 10 districts of Uganda and a longer distance in the Tanzanian main land from Hoima to Port Tanga on the Indian Ocean. She said that civil works in Uganda commenced in August while in the Tanzania the construction of the Thermal Insulation Plant is 95 percent complete.

“Government in January 2023 issued a permit to the EACOP company to construct the pipeline. The progress for detailed design for the EACOP pipeline and attendant facilities being undertaken by Worley in London and Dar el Salaam stands at 66 percent” the Minister reported.

One of the key issues in the implementation of the EACOP project has been the land acquisition which involves the compensation and resettlement of the Project Affected Persons (PAPs) in the Districts of Uganda.

Parliament was informed that “approximately 94 percent” of the PAPs have consented and signed documents while for resettlement while 88 percent of the PAPs that opted for cash payment have been paid.

On the refinery project, the Minister reported that her ministry is finalizing the procurement process for the contractor to build the 60000 barrels per day oil refinery at Kabaale in Hoima District.

The government announced the Final Investment Decision (FID) in 2022 which was a process of making a commitment to develop the country’s oil and gas resources through the implementation of the Tilenga and Kingfisher projects, and the EACOP project.

The FID announcement marked officially the beginning of the Engineering Procurement and Construction (EPC) phases and a commitment to see the first oil flow by 2025. Therefore, the refinery is one of the necessary infrastructures expected in place when the first oil comes out of the ground.

Nankabirwa reported to Parliament that 74 percent of the land acquisition process for the 213km refined products pipeline project that traverses six districts from Hoima to Mpigi has been achieved. This pipeline is separate from the EACOP because it will only transport the refined products to the oil hub in Mpigi before it is loaded on fuel tracks for commercial transportation to the rest of the country.

Legislators speak out

Members of Parliament who debated the statement by the Minister commended the government for the efforts put towards the development of the Oil and Gas sector.

Emmanuel Otala, the Chairperson of the Committee on Natural Resources asked the Minister to stick to the oil production roadmap but also argued the government to reconsider the course of the refined products pipeline.

“Refining the products in Hoima and transporting them to Mpigi and then transporting them on trucks back to the western part of the country seems not to be a well-planned project,” said Otala.

Deputy Speaker, Thomas Tayebwa said that Parliament also needs an update on the status of the Kabalega International Airport project and the critical oil roads projects for which loans were approved because they would facilitate the speedy process towards oil production.

Buwekula South MP, William Museveni however informed the House that there are still a lot of issues that remain unattended to in regard to the land acquisition for the EACOP project. He said that some of his constituents who will be affected by the project were given conflicting information about the right of way.

“Land was earmarked in 2005 and they made valuations but since then people have not been paid. Those who were paid, they were paid this year.  At first, they told us that after the pipeline is built, they (PAPs) will continue to use that land and that is why people relaxed but now they say people must leave completely” he said.

However, the deputy Speaker guided that some of the issues concerning the compensation and land acquisition need to be addressed to the Ministry without being discussed in Parliament.

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