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Uganda, a newcomer on the international oil stage, expects investments to the tune of US$15-20 billion over the next three to four years, the executive director of the country’s petroleum Authority, Ernest Rubondo said at a conference in South Africa.
Earlier this month, Nigerian Oranto Petroleum sealed two production sharing deals in Uganda, to explore for hydrocarbons around Lake Albert. The company won the rights to explore the area at Uganda’s first-ever oil and gas licensing round that took place last year, a decade after oil was first discovered in the country.
The first discovery was made in the Albertine Basin, near Uganda’s border with the Democratic Republic of Congo. The country’s total recoverable reserves are estimated at between 1.4 and 1.7 billion barrels of crude, with first oil planned to start flowing in 2020.
Other estimates peg Ugandan oil reserves at 6.5 billion barrels, with the International Monetary Fund estimating that the commodity could contribute about 4 percent of annual GDP over the next few years as long as they are managed well.
Besides Oranto Petroleum, another recent entrant into the Ugandan oil industry is Australia’s Armour Energy, which signed a production sharing agreement with the government in Kampala in September.
Even though there is no oil production in the landlocked east African country, it has already agreed to a pipeline that will transport its crude to the east African coast in Tanzania. While the venture will be public, both the Ugandan and Tanzanian governments are planning to take a combined 20-25-percent stake in the project.
Uganda also struck a deal for the construction of its first refinery with Italian Saipem and GE. The 60,000-bpd facility will process crude from fields operated by Tullow Oil, CNOOC, and Total. The consortium competed with 40 other companies, the Ugandan Energy Ministry said in August.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.