Kadaga questions oil production timeline changes
The Speaker of Parliament Rebecca Kadaga has questioned the recurring changes in timelines for achieving Uganda's first oil, which was recently pushed to 2022.
Kadaga's inquiry was in response to a presentation by Energy Minister Irene Muloni indicating that that Uganda was likely to start oil production in the fourth quarter of 2021 or even at the beginning of 2022.
Commercial quantities of oil were discovered in Uganda in 2006 and by that time, it was expected that Ugandans would see their first barrel in 2013. But the date has been shifting over the years. From 2013 it was moved to 2015/16 after which it was pushed to 2018. By the end of 2018, the government had announced three different dates upon which Ugandans would be able to see that very first barrel of crude oil that signals the start of oil production.
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Muloni says that the delay is because the joint venture partners Total, China National Offshore Oil Company (CNOOC) and Tullow needed to make the Final Investment Decision to develop the oil fields in Tilenga and Kingfisher blocks. The Final Investment Decision is expected by June, this year.
But Kadaga says that the change in dates is disturbing. She was speaking at an update meeting for selected Members of Parliament on the status of oil production in the country. The meeting was held at Lake Victoria Serena, Kigo on Friday.
The Speaker was supported by Nakasongola Woman MP Margaret Komuhangi who equally queried the extension of oil production timelines. Kashari North's Wilberforce Yaguma also demanded for an explanation for the delayed oil production since the discovery of oil in the Albertine Graben.
However, the Permanent Secretary in the Energy Ministry Robert Kasande explained that Uganda, being a land locked country, has also been a challenge for the sector to meet the set timelines saying that the country has no offloading vessel like Ghana that can drill oil and it is taken straight to the market. Kasande also cited negotiations with different companies as another challenge.
Kasande also highlighted different timelines leading to the first oil saying that the conclusion of land acquisition is estimated this month, conclusion of various agreements in May 2019, Final Investment Decision (FID) finally set for June 2019. The Engineering Procurement and Construction (EPC) commencement is expected in July 2019.
However, Kadaga cautioned the Energy Ministry to be cautious while drafting and negotiating oil agreements.
