According to Uganda’s Energy Minister Ruth Nankabirwa, the country is scheduled to kick start oil production as soon as 2025, she revealed on Wednesday in the capital Kampala.
Nankabirwa disclosed that the East African nation began oil exploration in two new locations which would increase its known reserves beyond the existing 6.5 billion barrels.
The minister also noted that Uganda had completely drilled 74 oil wells. The wells drilled are in the Tilenga and Kingfisher production areas.
“Sixty-three out of the planned 426 wells have been completed (at the Tilenga project) with positive hydrocarbon shows in the targeted reservoirs,” said Nankabirwa.
“Drilling activities have been focused on six of the 31 well pads that will host the 426 producer and injector wells for the Tilenga project. All three rigs designated for drilling are operational and 63 wells have been drilled as of August 16, 2024,” she added.
Nankabirwa disclosed that 7 other oil wells are almost done, at about 85% completion. Nine of the eleven oil wells necessary for the initial crude production at the CNOOC Uganda Limited-operated Kingfisher oil field have already been drilled.
Joint venture partners TotalEnergies E&P Uganda, China National Offshore Oil Company (CNOOC) Uganda Limited, and Uganda National Oil Company made a final investment decision in 2022 to execute several kinds of upstream projects for the government.
Tracing the Oil Money
Data from Petroleum Fund Report indicates that Uganda earned an additional Shs44 billion in oil revenue from taxes during the fiscal year ending June 30, 2023.
The country also collected Shs 125.9 billion (U$33,810,772) in oil tax receipts, a 54% increase over the previous year’s Shs81.9 billion.
The report also revealed that tax revenue had the largest percentage of the entire revenue at 94% (Shs 118.6 billion), while non-tax revenues came in at 6% (Shs7.4 billion).
According to the World Bank, Uganda’s oil industry expansion oil industry is expected to catalyse investment growth, with projects like the U$10 billion Lake Albert Oil Project and the U$4 billion East Africa Crude Oil Pipeline garnering major inflows.
In a report titled “The Global Economic Prospect 2024,” the World Bank projected that Uganda’s economy is set to go from 5.3% in 2023 to 6.0% in 2024.
The World Bank attributes this expected growth to the fact that it would result from infrastructure investment ahead of new oil production in 2025.