President Yoweri Museveni has officially commissioned the start of oil drilling at the Kingfisher oil field that is expected to produce 40,000 barrels of oil per day at peak once production commences in 2025.
The Kingfisher area is operated by Uganda’s oil joint venture partner CNOOC.
The event which took place in Buhuka, Kikuube district, on Tuesday has been described as one of the major milestones as the Chinese developer promised to deliver first oil by 2025.
In his remarks, the President said the colonialists had started exploring for the oil way back in 1920 but didn’t make progress.
“The British had tried to look for this oil when they were here from 1920 and what made them look for the oil were the seepages that were coming to the surfaces. They went on looking for this oil till 1956,” he said.
“When we came into government, a group from Shell came to me asking to sign an agreement with about Oil. They said that they were sure there was oil here. My advice to leaders is to avoid (Okutomera) bumping into issues of Africa. If you don’t know about something, it’s better to first inquire,” he added.
He hailed the joint venture partners for partnering with Uganda to develop the oil.
“I would like to salute the Partners that we have because we started with small companies but for now we have very strong powerful companies like CNOOC Uganda Ltd and TotalEnergies,” he said.
President Museveni used the occasion to allay fears that the oil being developed by Uganda may not be marketable given the debate to shift from fossil fuels to cleaner energy options.
CNOOC plans to use the commissioned rig to dill part of the 31 well pads from which oil will be extracted once production kicks off. The President said Uganda will continue to develop its oil and gas resources alongside other sources of energy.
“This petroleum resource will be here for a long time and we have more,” he said.
According to Ernest Rubondo, the ED of Petroleum Authority of Uganda, investment in development of the Kingfisher oilfield is expected to be over US$ 2 billion over the next 3 years until shortly after production starts and up to US$1.63billion over the remaining 20 years of the life of the oil field.
“US$ 346 Million was invested in the Kingfisher project in 2022 bringing the total cumulative investment in the project to US$ 1.07 billion. About $580 Million is expected to be invested in KFDA in 2023,” he said.
Mr Rubondo explained that at the current oil prices of about $87.5 per barrel, the Kingfisher project will account for about 15% of the total oil revenues to government from upstream, which is $6.9billion in total and $360million per year.
“The drilling rig, which you have just switched on Your Excellency, will be used to drill all the planned 31 production wells of this oil field,” he said.
He explained that the brand new state of the art rig was specially designed for this field.
“It is the strongest that has been used in the country to date, with about 8000 horsepower and consuming about 6 megawatts of power,” Rubondo said.
The Kingfisher oil field is about 15km long and 3km wide & is about 2km below the Lake Albert. The oil field is estimated to have a total of 560 million barrels of oil in place, out of which 190 million barrels of oil (33%) is expected to be produced over a period of 20-25 years
Uganda’s crude reserves are estimated at 6.5 billion barrels, of which 1.4 billion barrels are recoverable. According to the President, the 6.5 billion so far discovered is less than half of the area under exploration.
