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Uganda to develop US $5bn oilfields

The Dubai World Islands Project
The Dubai World Islands Project

Uganda plans to develop the Kingfisher and Tilega oilfields at a cost of US $5bn in a bid to expedite the growth of its oil industry. The two oilfields are currently the subject of a tax dispute between government and three oil companies.

According to Permanent Secretary of Energy, Robert Kasande, this amount forms part of the US $15bn to US $20bn projected to flow into the country’s developing oil industry in three to five years, including the construction of a refinery and crude pipeline. “The funding will be used to drill over 500 wells and construct two central processing facilities and a water plant. Plans are also in the pipeline to award exploration companies five blocks by the end of this year,” he affirmed.

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The five blocks

The five blocks on offer are located in the Albertine Basin; namely: Block 01 (Avivi), Block 02 (Omuka), Block 03 (Kasuruban), Block 04 (Turaco) and Block 05 (Ngaji). The bidding process will run for five months. The licensing round is scheduled to conclude by December 2020, with successful firms set to receive Petroleum Exploration Licenses.

Total, CNOOC and Tullow Oil jointly own the Kingfisher and Tilega fields and the Ugandan government is in negotiations with Tullow to reduce its stake in the projects and allow final investment decisions to be concluded.

The company indicated in its trading update that, joint venture conversations with the government of Uganda are ongoing and Tullow remains committed to reducing its equity stake in the project ahead of a final investment decision.

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