An oil rig being used to drill oil at one of the sites in the Albertine region in Uganda. PHOTO | FILE
By TEA Reporter
Uganda’s oil production plans are now in
earnest after the Cabinet approved the issuance of production licences
to France’s Total and Britain’s Tullow Oil.
Speaking to The EastAfrican, the Minister for ICT Mr Frank Tumwebaze said a formal announcement will be made by the Ministry of Energy.
Kampala had already issued an oil production licence to China
National Offshore Oil Company (CNOOC) in 2013. The three firms, which
jointly own the Kingfisher block in the oil rich Albertine region,
discovered 6.5 billion barrels of crude oil in the area in 2006.
The oil firms have also agreed to participate
in the construction of the Uganda-Tanzania pipeline that is expected to
be complete in 2020.
Uganda, suffering from a prolonged sluggish
growth, hopes that crude wealth will boost the economy; despite an
ongoing glut in the global oil sector.
On Monday, the government invited three
Nigerian firms and one from Australia to negotiate for production
sharing agreements for new exploration blocks. The government had
announced its first competitive bidding round for six blocks in February
last year. Only seven oil firms out of 16 that had picked bidding
documents submitted their bids.
The government expects to start crude exportation by 2020.
The oil production licences issued will run for a period of 25 years.
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