Uganda Starts Commercial Drilling of Oil

Ugandan President Yoweri Museveni launched the drilling process at the Kingfisher Oil Field, operated by the Chinese oil giant China National Offshore Oil Corporation (CNOOC).

The president said the country would carefully use the oil revenues for the development of the country. The government has previously said the revenues would be used for transport and energy infrastructure development.

Chinese Ambassador to Uganda Zhang Lizhong said the investment by the CNOOC in Ugandan oil fields is the largest investment by China in Uganda. Zhang was optimistic that the investment will contribute to the well-being of Ugandans.

Chen Zhuobiao, CNOOC Uganda president, said the corporation is committed to ensuring that there is skills, knowledge and technology transfer to Ugandans. Chen said the corporation will ensure that the local people benefit from the oil by providing, among others, contracts to local companies.

He reiterated that the CNOOC will continue to adhere to high standards of environmental protection.

Proscovia Nabbanja, chief executive officer of Uganda National Oil Company, a state-owned oil enterprise, told reporters that 31 wells will be drilled in the Kingfisher Oil Field, producing 40,000 barrels of oil per day.

Nabbanja said Kingfisher will be drilled at the same time with the Tilenga oil field operated by French oil giant TotalEnergies. She said 426 wells will be drilled in the Tilenga area producing 190,000 barrels of oil per day.

She said the crude oil drilled from both fields will be evacuated to a Central Processing Facility before it is exported to the international market through the East African Crude Oil Pipeline (EACOP) to the Tanzanian seaport of Tanga.

Nabbanja said Uganda is still on track to produce its first oil by 2025.

According to the Ministry of Energy and Mineral Development (MEMD), the country also plans to construct an oil refinery.

At the same event, Uganda officially endorsed the start of the construction of the EACOP, after it handed over a construction license.

A construction license is required to enable the EACOP project to formally start on-the-ground construction activities in Uganda as part of the development of the 1,443-km pipeline from the oil fields to the Tanzanian seaport of Tanga.

"This marks another step forward for EACOP as it allows the commencement of our construction activities in Uganda upon completion of the ongoing land access process," said EACOP Managing Director Martin Tiffen.

Uganda in 2006 discovered 6.5 billion barrels of oil, of which 1.4 billion barrels are commercially viable, according to the MEMD.

4155/v