HISTORIC: Uganda kicks off Oil drilling Today

President Yoweri Kaguta Museveni and many other government officials will today gather to witness the commencement of drilling works for the Kingfisher oil field at the parallels of Lake Albert in mid-western Uganda.

This in effect marks the start of trials for oil drilling using the rig that was hauled in the country last August and assembled in November. The process will culminate in commercial production in late 2025 but could stretch into 2026.

The Kingfisher oil field, formerly known as Exploration Area (EA) 3A, is part of the Kingfisher Field Development Area (KFDA) that straddles Kikuube and Hoima districts. The KFDA is operated by Cnooc Uganda Ltd, which awarded the tender for construction of the required infrastructure to pump oil to a joint venture of China offshore Oil Engineering Company, and China Petroleum and Construction Corporation.

It is the successful drilling of oil wells at EA31 in 2006 by the Australian wildcatter, Hardman Resources and its Anglo-Irish partner Tullow Oil, that led to the summation of Uganda’s oil deposits as “commercially viable”, which announcement was made by Mr Museveni during a national prayer breakfast convened at Kololo Independence Grounds.

Tullow Oil PLC subsequently acquired Hardman’s stake, and in 2011, the former farmed down to the French TotalEnergies EP and China’s Cnooc. Following commencement of operations in Uganda in February 2012, Cnooc was tapped as operator of the EA3. At the time, only the Kingfisher oil field had a production licence, which had been conditionally granted to Tullow around the time of the farm down. The conditions to be satisfied included, among others, submitting an amended Field Development Plan and Petroleum Reservoir Report acceptable to the government, in accordance with the Petroleum Act and International Petroleum Best Practices.

The reports were submitted in November 2012 and rigorously reviewed, leading to lifting of the conditions on September 16, 2013.

On September 25, 2013, Ministry of Energy technocrats and Cnooc-Uganda officials led by the then Vice President Jin Weigen, filed in the Ministry of Energy’s boardroom on level four at Amber House to celebrate and announce issuance of Kingfisher oil production licence, the green light to install and operate facilities required to pump oil from the ground.

The production licence was. however, a footnote in the grand scheme of things as the government and the oil companies—then as Cnooc, Total E&P (now TotalEnergies EP), and Tullow Oil which has since closed shop in town—were involved in tight rope pulling on the commercialisation plan for the Uganda oil project.

The stock tank of in-place oil in the KFDA is estimated around 800 million barrels, of which 25 percent will be developed in phase one—producing 40,000 barrels of oil per day during peak production.

The capital expenditure for development of the KFDA is $2b.

Source: Daily Monitor

1 Comment

  • Analytical & Research Agency March 25, 2024

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