Uganda National Oil Company (UNOC) expects to start oil production from the Tilenga project in the first half of the year 2025, according to Ms. Aisha Nabbanja, the chief executive officer but banking experts think otherwise.
But according to Edward Ssenoga, Second Lead Economist from the African Development Bank East African Office, Uganda is on the back foot and more fast-tracking needs to be done if the 2025 deadline is to be beaten.
“We are racing against time for Uganda. We need to harness this fossil fuels for short term energy security but time is not on our side,” adding that there is need to mobilize and use all available resources to ensure that the King Fisher and Tilenga oil fields commence pumping oil from the ground by early 2025 to avoid losses for the country as a result of lack of returns from the huge investments being made.
Some experts indicated that Uganda should have begun pumping its oil before 2030 or 2040 when the world is expected to shift to electric vehicles. The energy transition is expected to bring a paradigm shift and pressures on the oil and gas sector players and regulators.
Uganda is currently constructing infrastructure valued at $10 billion for the Tilenga project by TotalEnergies and the CNOOC-owned Kingfisher project in Buliisa, Nwoya and Kikuube districts respectively
The Tilenga project in the Buliisa and Nwoya district is operated by French energy powerhouse TotalEnergies in partnership with China;s CNOOC Ltd. Oil from the project will be transported via the $3.5 billion East African Crude Oil Pipeline (EACOP) to the port of Tanga in Tanzania for exports. EACOP has the capacity to send up to 246,000 barrels of crude oil per day out to world markets by as early as 2025.
TotalEnergies is the largest shareholder in EACOP with sixty two percent stake. Other investors include the state-run UNOC and Tanzania Petroleum Development Corporation, which has fifteen percent while China’s CNOOC holds only eight percent.
There have been various developments of infrastructure by the government since the discovery of oil nearly twenty years ago like roads to the oil fields, pipelines, installation of oil rigs and these risks going to waste if the first oil drop runs through the EACOP pipeline by 2025.
Many people who have positioned themselves to benefit from the oil through the hospitality sector like hotels, food suppliers, health service providers, insurance brokers, to mention but a few. The onus is on all stakeholders led by the government to ensure that Uganda begins pumping her oil by 2025 or else the project will be a white elephant but above it will lead to great losses on the part of the main investors like TotalEnergies and CNOOC, which would lead to legal battles.
Meanwhile the project finds itself battling the brunt of environmental activists who say that the project will have a negative impact through oil spills and its adverse effects but the government maintains that all the required environmental impact assessment procedures have been done, and there is nothing to worry about.