Uganda's Energy Minister Irene Muloni (right) hands over documents to
Tullow Uganda's Jimmy Mugerwa (left), Total E&P's Adewale Fayemi
(second left) and CNOOC'S Xiao Zongwei during the awarding of oil
production licences in Kampala on August 30, 2016. PHOTO | MORGAN
MBABAZI
By HALIMA ABDALLAH
In Summary
Uganda has issued eight oil production licenses to two
firms, British Tullow Oil and France’s Total as it moves to speed up its
export plans.
On Tuesday, Tullow was allotted five licences while Total got
three, bringing the total permits issued to nine after the Uganda handed
one to the Chinese National Offshore Oil Company (CNOOC) in 2013.
The country has set a target of 2020 for its oil to begin
flowing from the 6.5 billion barrels of reserves confirmed so far out of
which between 1.4 and 1.7 billion barrels are recoverable.
Exploration efforts for more hydrocarbons have also been
enhanced with the signing of production sharing agreements (PSAs) with
three Nigerian and one Australian earlier this month.
Uganda’s oil fields, for which the production licences were
issued, are jointly owned by Total, Tullow and CNOOK following a $2.9
billion farm down by Tullow to the two others in February 2012.
“The companies are expected to move towards Final Investment
Decision within 18 months after the issuance of the production licenses
and field oil is expected in the year 2020,” said energy minister, Irene
Muloni while handing over the licenses in Kampala.
The companies are expected to invest $8 billion in the
oil-related infrastructure. The investments will include drilling of
about 500 wells, construction of central processing facilities and
feeder pipeline among others.
Some of the petroleum will be refined locally by a 60,000
barrel-refinery to be built in Kabale, Hoima district while the rest
will be evacuated by a crude pipeline through Tanzania to Tanga Port.
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