Uganda: Government to Develop Oilfields worth USD 5 Billion

In a bid to expedite the growth of its oil industry, Uganda plans to spend at least $5 billion on the development of the Kingfisher and Tilega oil fields, which are currently the subject of a tax dispute between the government and three oil companies.

This amount forms part of the $15 billion to $20 billion projected to flow to its developing oil industry in three to five years, including the construction of a refinery and crude pipeline, according to Permanent Secretary of Energy, Robert Kasande.

“The funding will be used to drill over 500 wells and construct two central processing facilities and a water plant. [There are also] plans to award exploration companies for five blocks by the end of this year,” he said.

The five blocks on offer are located in the Albertine Basin; namely: Block 01 (Avivi), Block 02 (Omuka), Block 03 (Kasuruban), Block 04 (Turaco) and Block 05 (Ngaji). The bidding process will run for five months. The licensing round is scheduled to conclude by December 2020, with successful firms set to receive Petroleum Exploration Licenses.

Total, CNOOC and Tullow Oil jointly own the Kingfisher and Tilega fields and the Ugandan government is in negotiations with Tullow to reduce its stake in the projects and allow final investment decisions to be concluded.

“In Uganda, joint venture conversations with the government are ongoing. Tullow remains committed to reducing its equity stake in the project ahead of a final investment decision,” the company said in its trading update.