Uganda is set to start producing its own crude oil by 2025, after TotalEnergies and China National Offshore Oil Corporation inked a deal with Uganda and Tanzania worth USD10 billion (Ksh1.1 trillion).
The deal entails oil exploration in West Uganda, the construction of processing facilities, a pipeline network in Uganda, and an exportation pipeline to a Tanzanian port, where the oil will be exported overseas.
“In the name of the joint venture partners and in the name of TotalEnergies, I declare the final investment decision for the Lake Albert development project,” TotalEnergies Chief Executive Patrick Pouyanne.
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The oil fields were discovered along Uganda’s border with the Democratic Republic of Congo in 2006, but exploration has been delayed due to tax disputes between the government and the companies involved.
It is estimated that Uganda has oil reserves amounting to six billion barrels, with only 1.4 billion barrels being recoverable.
According to Uganda’s Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu, the project is estimated to create at least 160,000.
“This milestone puts us on the path to first oil in 2025,” said Ssentamu.
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If Uganda actualises the dream of mining and exporting oil, it will beat Kenya, which discovered oil reserves in Turkana estimated to hold 2.85 billion barrels of oil. However, in a recent update, Tullow Oil said that the commercially extractable volume of oil is 585 million barrels.
Tullow is yet to develop the field for commercial production due to approval delays for land and water rights, a tax dispute and Covid-19 disruptions.
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