A look at already awarded oil contracts

Energy Minister Ruth Nankabirwa is shown around during the launch of the Kingfisher development project in Buhuka Parish, Kyangwali subcounty in Kikuube district. PHOTOs BY FRANCIS MUGERWA

What you need to know:

Now that signing of the Final Investment Decision is done, oil companies and related contractors are ironing out finer details of their contracts to begin the real work as the country prepares for first oil by 2025. 

Oil companies Total Energies and CNOOC will now give a final nod to tier 1 contractors to undertake upstream operations as the country counts down to first oil in 2025.

This follows the signing of the Final Investment Decision last month in Kampala with Lake Albert Development Project partners including TotalEnergies, and China National Offshore Oil Corporation (CNOOC), the Uganda National Oil Company (UNOC) and the Tanzania Petroleum Development Corporation.

The major project represents a total investment of approximately $10 billion (Shs35 trillion)

Last year, Total Energies signed Conditional Letters of Award to five contractors for the main surface facilities, engineering, procurement, supply, construction and commissioning as well as five drilling packages for the Tilenga project located in Nwoya and Buliisa districts.

The letters were in respect to Tier 1 contractors including: A consortium comprising CB & I UK Limited (a McDermott) and Sinopec International Petroleum Service Corporation for engineering, procurement, supply, construction and commissioning of the central processing facility, flowlines, and other associated surface facilities.

Other companies include; Schlumberger Oilfield Eastern Limited for three well engineering packages, Vallourec Oil and Gas France for one well procurement package - Casing, Tubing and Associated Services and ZPEB Uganda for one rigs package - Onshore Drilling Rigs, Tubular

Running and fishing services

These conditional letters of award were a first step that the oil companies give to contractors to allow for the launch of detailed engineering and procurement activities before the final approval by the Partners.

This followed a comprehensive, competitive and thorough tender evaluation and contracting process that began with the phased submission of front-end engineering and design proposals to ensure project optimization.

The venture partners noted that they were pleased to sign conditional letters of award for the Tilenga project to five highly qualified industry players.

Following the launch of the projects, the Petroleum Authority confirmed contracts worth $6b (Shs21trillion) for over 40 work packages and contracts for the Tilenga, Kingfisher and EACOP projects were submitted by the licensees for approval before final award.

Already, there has been a lot of activity since FID was announced, signalling what could be expected during the development stage of the oil sector before first oil in 2025.  

Contracts in the oil sector that have already been awarded

Ten contracts for drilling and management of wells have been signed for the Tilenga Project.

ZPEB Uganda won the contract for construction of the drilling rigs, and the detailed design of the drilling rigs has commenced. 

These rigs are to be used in drilling up to 426 wells, scheduled to commence in the last quarter of 2022.

Electrical Logging to China Oilfield Services will undertake electrical logging while EnviroServ will undertake handling drilling waste management. 

The contract for civil works to prepare over 700 acres of Industrial area for the Tilenga project was awarded to Mota Engil Uganda.

These works include bush clearing, fencing, construction of drainage and internal roads and preparation of the ground to host different facilities. 

The facilities to be hosted in this industrial area include: the Central Processing facility (CPF), Construction Camps, Drilling Support Bases, and Operation Support Bases, among others.                                                                            

The companies above have also made significant commitments to promoting national content through employing Ugandans, use of Ugandan goods and services as well as technology transfer.

MotaEngil has sub-contracted various Uganda companies including; Gauff Consultants, Prand Engineering, Civtec and Fabrication Systems, among others to undertake some of these works.

Preparation of the Tilenga industrial site was at 35 percent completion at the end of 2021 and is expected to be concluded by mid-2022.

A contract for construction of pads on which the wells for the Tilenga project will be drilled was awarded to MotaEngil Uganda.

The contract includes preparation of 31 well pad sites, installation of conductor pipes and construction of well cellars among others.

The work is expected to commence in the first quarter of 2022, in preparation for the commencement of development drilling in the last quarter of 2022.

A contract for civil works and construction of well pads 1, 2 and 3 for the Kingfisher project together with construction of in field access roads was awarded to Excel Construction, a Ugandan company.

Additional contracts for Kingfisher project, including drilling and well services are due to be awarded during 2022.

A contract to design and construct a permanent camp, supply base and safety and security check station for the Kingfisher Project EPC-2 Infrastructure Facilities was awarded to China State Construction Engineering Corporation.

Albert development project   

The Lake Albert development project encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline (EACOP) in Uganda and Tanzania.

The Tilenga project, operated by TotalEnergies, and Kingfisher by CNOOC, are expected to start producing oil in 2025 and to reach a cumulative plateau production of 230,000 barrels per day.

The upstream partners are TotalEnergies (56.67 percent), CNOOC (28.33 percent) and UNOC (15 percent). Production from the oil fields in Uganda will be transported to the port of Tanga in Tanzania through the East African Crude Oil Pipeline cross-border pipeline, whose shareholders are TotalEnergies (62 percent), UNOC (15 percent), Tanzania Petroleum Development Corporation. (15 percent) and CNOOC (8 percent).

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