The oil and gas sector is progressing well to transform Uganda’s economic landscape through investments and strategic partnerships to drive growth, create jobs and generate revenue, says Energy and Mineral Development Minister, Dr Ruth Nankabirwa.
During a mid-year media briefing, the minister shared updates on the sector’s advancement saying activity on the Tilenga and Kingfisher development areas is actively underway with TotalEnergies, CNOOC and UNOC working to see those projects a success.
So far, the Tilenga project has completed 63 wells with 426 planned while the Kingfisher project has started drilling production wells with nine successfully completed, according to the minister.
Dr Nankabirwa added during the presser that civil works at the Tilenga Industrial Area are 99.7% complete with the construction of the Central Processing Facility progressing well.
She said with drilling of production wells beginning in January 2023, the Kingfisher Development Area project has seen significant progress.
“The Tilenga Project, spanning both the North and South of the Nile in Nwoya and Buliisa Districts, is making remarkable progress.”
“Drilling activities have so far focused on six (6) of the thirty-one (31) well pads that will host 426 producer and injector wells for the Tilenga project. The well pads are Jobi-Rii 05 & 04, Ngiri 03 & 01, and Gunya 01 & 04. All three rigs designated for drilling are operational, and a total of 63 wells have been drilled as of August 16, 2024. Currently, seven well pads are over 85% complete and ready to receive a rig,” Dr Nankabirwa said.
The minister continued that the East African Crude Oil Pipeline (EACOP) is progressing with civil works commencing at the Main Camps and Pipe Yards in Hoima and Sembabule districts as the Uganda Refinery Project negotiations continue with the aim of boosting oil production, driving economic growth and generating national revenue.
“The Engineering, Procurement, Construction Management and Commissioning (EPCMC) activities for the EACOP project are ongoing in London, and Dar es Salaam. Worley is undertaking this work with its subcontractors – ICS Engineering in Uganda and Norplan in Tanzania. The overall progress of the EPCMC activities was at 39.2%; the engineering phase was at 81.1%, procurement at 54.5%, and construction and commissioning at 15.4%. Detailed engineering, being carried out by Worley, was at 89.1%, surpassing the planned 88.3%.”
She updated that that the construction of the thermal insulation plant in Nzega District, Tabora region in Tanzania was completed and commissioned on March 26, 2024.
The minister added that seven batches of line pipe, totaling to 500kms, have so far been delivered to Tanzania of which five batches have been delivered to the Thermal Insulation System plant in Nzega.
Dr Nankabirwa disclosed that the China Petroleum Pipeline Engineering Ltd (CPP) – the pipeline construction contractor, has begun civil works at the Pump Stations (PS) and Main Camp and Pipe Yard (MCPY) sites in both Uganda and Tanzania.
She explained that the EACOP project spans approximately 2,740 acres in Uganda, affecting 3,660 individuals, with 177 requiring resettlement housing.
“All resettlement houses have been constructed and handed over.”
The minister said that so far, 95% of affected persons have received compensation and 97% have signed compensation agreements, with remaining payments ongoing.
She added that however, there are 112 cases under consideration for compulsory land acquisition due to issues such as untraceable individuals, landowner disputes, refusal of compensation offers and lack of legal title.
In her updates, Minister Nankabirwa said that the Kabaleega Industrial Park has registered key milestones with the airport expected to be ready by the third quarter of 2025.
Contracts valued at US$ 5 billion have been awarded for the Tilenga, Kingfisher, and EACOP projects, with US$ 2 billion allocated to Ugandan companies.
On the Uganda Refinery Project, she said that negotiations for key commercial agreements, including implementation, crude oil supply and shareholder agreements, commenced in January 2024 between the Government and Alpha MBM Investments LLC, following the signing of a Memorandum of Understanding in December 2023.
Once finalised, the consortium is expected to swiftly initiate project implementation, marking a crucial step towards Uganda’s goals of increasing oil production, stimulating economic growth, and generating substantial national revenue.
The sector has directly employed 14,451 people, with 13,048 being Ugandans (90%). Local content and community employment have been prioritised, with 92% of the Licensee’s Contractors and their sub-contractors being Ugandans.
