Uganda’s First Oil Field Operation Sparks Hopes of Economic Boost

Uganda’s First Oil Field Operation Sparks Hopes of Economic Boost

/ Oil & Gas / Wednesday, 25 January 2023 06:58

Uganda has officially launched an oil drilling program as it seeks to join the club of crude-producing nations with a mega-project that has not gone well with environmental groups.

The Kingfisher field is part of a $10 billion effort to extract Uganda's oil reserves under a lake in the west of the country and build a lengthy pipeline to transport and ultimately ship the crude to international markets via an Indian Ocean port in Tanzania.

The official commissioning of the drilling campaign on the Kingfisher oilfield was announced by the Petroleum Authority of Uganda (PAU).

Uganda's first oil is expected to flow in 2025, almost two decades after reserves were first discovered in one of the world's most biodiverse regions.

The Kingfisher field, operated by the state-owned China National Offshore Oil Corporation (CNOOC), is expected to produce 40,000 barrels of oil per day at its peak, PAU said.

The 2006 discovery of oil at Lake Albert sparked high hopes of an economic boost for Uganda, a landlocked East African country where many live in poverty.

Also read: Africa's Oil and Gas Future: Series of Challenges Ahead

There are an estimated 6.5 billion barrels of crude under the lake, of which about 1.4 billion are recoverable. The reserves are expected to last up to 30 years, with production peaking at 230,000 barrels a day.

The overall project is being jointly developed by CNOOC, France's TotalEnergies and the state-owned Uganda National Oil Company.

However, the plans to tap the oil at Lake Albert, a 160-kilometer (100-mile) long body of water separating Uganda from the Democratic Republic of Congo, have run into strong opposition from rights activists and environmental groups, which say it threatens the region's fragile ecosystem and the livelihoods of tens of thousands of people.

The fields are located in several natural reserves, one of which extends to Murchison Falls, the country's largest national park.

The government has vowed to move ahead with the scheme despite the opposition and calls by the EU parliament last year for it to be delayed over rights concerns.

Uganda last week issued a license for the construction of a $3.5 billion heated pipeline that will run from Lake Albert to the Tanzanian port of Tanga. At 1,443 kilometers (900 miles), it is set to become the longest of its type when completed.

The license was granted to the East African Crude Oil Pipeline Company Ltd., which is 62% owned by TotalEnergies. The state oil companies of Uganda and Tanzania hold 15% each, with the remainder owned by CNOOC.

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