Uganda, Equatorial Guinea join oil exporters club
The prospects for the hydrocarbon sector in Uganda are looking bright – Uganda will soon export its first crude oil from its Lake Albert oil discovery to the international market, making it one of the countries to have joined the oil exporting countries after the government came to an agreement with Tanzania that enables it to transport its crude oil through the East African Crude Oil Pipeline (EACOP), a 1,445-kilometre pipeline from Hoima, Uganda, to the port of Tanga in Tanzania is the proposed route.
“It is exciting times for Uganda, we are now preparing for production,” Irene Muloni, the Minister of Energy and Mineral Development, said during the Africa oil week Ministerial and VIP Symposium held in Cape Town, South Africa.
“It has taken us some time, but we are there. The exploration discovered six billion barrels and we have plans to recover about 1.4 billion of these. And now the issue is to get that out of the ground. We’ve already agreed with Tullow, Total and CNOOC the way forward to commercialise that oil,” Muloni added.
She said Uganda is currently focused at accessing the international markets through the pipeline to add value and ensure security of supply within the East Africa region as well as the oil refinery to respond to the importation of petroleum products.
Once construction of the refinery is completed in 2022, it will produce kerosene, gasoline, diesel, heavy fuel oils for Uganda and other local markets. In addition to the refinery an airport, hospital and a 100-megawatt thermal power plant are being constructed.
“For these two big projects the pipeline is more advanced with the FEED signed and an intergovernmental agreement with Tanzania. We are now negotiating the host government agreements between us and setting up the private companies that are going to own and operate the pipeline. For the refinery we’ve already approved the configuration of the refinery that will handle 60,000 barrels per day. Those two projects are ongoing and as a country we are preparing the infrastructure,” Muloni said
With the Lake Albert oil beginning to flow, Uganda has set its sights on further resources and in May announced a second licensing round for additional oil exploration in five blocks in western Uganda that will be announced before the end of 2019.
“It is all about attracting companies to come and join us in the exploration. We have only licenced about 15% of the resources but the appetite is there because the parameters are world class. The success rate when you drill is hovering around 85%, meaning every time you drill a hole there is a good chance of success,” Muloni said.
Later this month Equatorial Guinea will announce the winning bids for its 27 oil and gas licences. The bidding round is reported to have attracted a high level of interest, especially among Chinese oil and gas companies following a roadshow in Beijing.
“We have many companies who have expressed an interest. We have pre-selected some of these because we see the most serious companies, but the important thing is that the key blocks have already attracted interest,” Gabriel Mbaga Obiang Lima, the West African country’s Minister of Mines, Industry and Energy said.
Equatorial Guinea is already home to several major sector players including ExxonMobil, Kosmos, Marathon and Noble and hopes to attract several more in this latest round.
“We are doing well, and we are delivering great revenue, but the issue here is what we are going to do in the future. Two of the fields are mature fields and we need to decide about them going forward. That revenue has allowed us to carry out investment in our infrastructure, but we are still keen on bringing in more companies,” Obiang said.