KAMPALA: The long-awaited Final Investment Decision (FID) between the government of Uganda and multinational oil giants Total Energies of France and CNOOC of China has been signed.
This paves the way for Uganda’s oil project to head to the next development and construction phases and subsequently start commercial oil production.
President Museveni officiated at the ceremony that was attended by Tanzania Vice President Dr. Philip Mpango, who represented President Samia Hassan Suluhu.
Eng. Irene Batebe, Permanent Secretary at the Ministry of Energy, who opened the series of speeches at the function held at Kololo Independence Grounds in Kampala, described the day as monumental in the history of the country.
“Today is a monumental day in the history of the two sister countries of Uganda and Tanzania. This day shows that consistency and hard work pay off in the long run, and we want to appreciate the efforts of our predecessors who built the foundation, “she said.
“Now that we have achieved Uganda Oil FID, we’ll intensify issues of coordination, delivery in a timely manner of equipment to the site, local participation and approvals. We pledge to continuously support the oil companies in the execution of their work. Uganda’s journey has been steady and measured. This process has followed deliberate action by the government. Funds have been mobilised, and the project is viable, “she added.
Energy Minister Ruth Nankabirwa said oil and gas are expected to catapult the country into middle-income status.
Through various programs, the oil industry will have a positive impact on the economy. “East Africans and Ugandans are expecting to get jobs, and the pipeline has its biggest part, which calls for job creation,” she said.
“Close to 160,000 jobs are expected to be created, as well as the provision of goods and services to the industry. In addition, Uganda and Tanzania’s tax bases will significantly expand, “she added.
The Board Chairman of Uganda National Oil Company, Mr. Emmanuel Katongole, hailed President Museveni for “patiently and wisely guiding the sector when difficult decisions have to be made.”
He asked joint venture partners to expedite work because “the people cannot wait to taste the fruits of oil.”
We must work together to ensure that a reasonable portion of the US $15 billion is taken by Ugandans. Let’s commit to achieving our first oil as soon as possible. Make 2025 a reality, “he said.”
TotalEnergies SE chief executive Patrick Pouyanne said the FID comes at a time when world crude reserves are declining.
Therefore, the Lake Albert project will provide the necessary quantities to compensate for the declining production, he said.
Mr. Pouyanne added that TotalEnergies SE is committing to investing $10 billion in the Uganda oil projects, mainly the East African Crude Oil Pipeline, the Tilenga Project, and Kingfisher Projects, before the first oil in 2025.
President Museveni stated in his speech that Uganda’s oil journey began with the British in the 1920s. They did not, however, make any progress.
“The British began petroleum drilling in Uganda. Kibiro was the name given by our forefathers to the location. “Our locals demonstrated to the British that there was something boiling from underground,” he claimed.
“The British searched for this oil but were unable to locate it. When I first joined the government, I read the file. According to the British Commissioner of Geological Survey, the oil was there but had evaporated.
In 1986, investors approached me about the oil in Lake Albert. I turned them away because I did not have anyone on my side (Ugandan) who understood oil. We then sent people to go and study oil so that we could engage investors better, “he added.
TotalEnergies EP Uganda and CNOOC are licenced to operate in Uganda after each acquiring a 66.66 percent stake from Anglo-Irish Tullow Oil PLC.
The FID means launching Uganda’s oil project into the next development and construction phases and starting commercial oil production by 2025.
This means TotalEnergies will start construction on its Tilenga oil project in the Nwoya and Buliisa districts.
The two oil companies, along with the Uganda National Oil Company (Unoc) and Tanzania through its national oil company, TPDC, are shareholders in the proposed EACOP, which will transport crude oil from the central point in Hoima to Tanga Port en route to the international market. The shareholding in the EACOP holding company is as follows: Unoc with 15 percent, TotalEnergies East Africa Midstream B.V with 62 percent, Cnooc with 8 percent, and TPDC with 15 percent.
The capital cost of the 1,443km duct is estimated to be $3.55 billion (Shs13 trillion), with international lenders funding 70% of the cost. The Ugandan section of the pipeline is about 296km long, passing through 10 districts, 25 sub-counties, and 172 villages, and affecting at least 4,121 people.