News / Africa

Uganda Signs Development Deal with Major Oil Companies

FILE - An aerial view of an oil exploration site in Bulisa district, approximately 244 km (152 miles) northwest of Kampala in this undated handout photo from Tullow Oil Uganda, received by Reuters July 4, 2012. FILE - An aerial view of an oil exploration site in Bulisa district, approximately 244 km (152 miles) northwest of Kampala in this undated handout photo from Tullow Oil Uganda, received by Reuters July 4, 2012.
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FILE - An aerial view of an oil exploration site in Bulisa district, approximately 244 km (152 miles) northwest of Kampala in this undated handout photo from Tullow Oil Uganda, received by Reuters July 4, 2012.
FILE - An aerial view of an oil exploration site in Bulisa district, approximately 244 km (152 miles) northwest of Kampala in this undated handout photo from Tullow Oil Uganda, received by Reuters July 4, 2012.
— After years of negotiations, the Uganda government has finally signed a deal with three major oil companies for development of its petroleum reserves.

On Thursday Uganda’s Ministry of Energy announced that it had signed a memorandum of understanding with the U.K.’s Tullow Oil, France’s Total and China’s Cnooc, paving the way for the development of the oil reserves recently discovered in western Uganda.

The government had been in talks with the oil majors for years, but until this week no agreement had been reached.

Gloria Sebikari of the ministry’s petroleum department says the deal with the three companies should lead to more than just development of the oil fields themselves.

“It’s a significant step, because this memorandum of understanding gives a road map for commercialization of the petroleum resources that are being discovered in Uganda," she said. "The plan provides for use of petroleum for power generation, supply of crude oil to the refinery to be developed in Uganda, and then export of crude oil to an export pipeline or any other viable option to be developed by the oil companies.”

Energy Minister Irene Muloni told reporters Thursday that the companies had already invested up to $3.5 billion in exploration.

But the timeline for commercial production of Uganda’s oil has already been pushed back several times. Sebikari says it will still be at least two years before the black stuff is pumped out of the ground.

“The initial plan is to have crude oil for power generation, and we are thinking this can be achieved by 2016. But commercial production to the refinery should be by 2017 [or] 2018 because that’s when we see the refinery being in place,” said Sebikari.

Kenya and Uganda had also discussed building a pipeline from South Sudan’s oil fields to the Kenyan coast. But the conflict in South Sudan has put those plans on hold.

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Comment Sorting
Comments
     
by: Chrislau39@ovi.com from: Mwanza
February 09, 2014 10:31 AM
its a good opportunity to boost socio-economic activities especially to the rural people who are mostly affected Byeje different development intervation .


by: Jfrank from: Nigeria
February 09, 2014 9:57 AM
I pray Uganda's oil bring her blessings rather than curses like nigeria. Down with Britain for Amalgamating nigeria.


by: Kiptui shadrack from: kericho,kenya
February 08, 2014 3:51 PM
It will assist to boost the economy of the uganda and ugandans in large.


by: David from: Kinshasa
February 08, 2014 3:19 PM
What's about DRCongo section in oil lake Albert which we share with Ouganda? We suppose to start exploit this oil on same time DRCongo-Uganda.


by: Allan K from: masaka, uganda
February 08, 2014 1:58 AM
It will be a great step ahead in a robust economic debt for our country


by: safeullah from: kabul
February 07, 2014 2:51 PM
It will be a positive step for development of Uganda for a bright future

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