The National Environment Management Authority (NEMA) has allowed the China National Offshore Company Uganda Limited (CNOOC)to go ahead with explorations at the Kingfisher oil deposits in the Albertine Graben.
This comes after NEMA’s Executive Director Dr. Tom Okurut on Monday issued CNOOC officials an Environment and Social Impact Assessment (ESIA) Certificate, which will help them undertake operations at the Kingfisher Development Area.
The CNOOC officials, who were represented by Mr. Zhao Shunqiang had earlier on interacted with several officials at the Ministry of Energy and Mineral development prior to a review of the ESIA, which was undertaken by various Government of Uganda Institutions including the Petroleum Authority of Uganda.
It should be noted that Uganda plans to develop the Kingfisher and Tilega oilfields at a cost of USD5Bn in a bid to expedite the growth of its oil industry. The two oilfields are currently the subject of a tax dispute between the government and three oil companies.
According to Permanent Secretary of Energy, Robert Kasande, this amount forms part of the USD15Bn to USD20Bn projected to flow into the country’s developing oil industry in three to five years, including the construction of a refinery and crude pipeline.
“The funding will be used to drill over 500 wells and construct two central processing facilities and a water plant. Plans are also in the pipeline to award exploration companies five blocks by the end of this year,” he affirmed.
The five blocks on offer are located in the Albertine Basin; namely: Block 01 (Avivi), Block 02 (Omuka), Block 03 (Kasuruban), Block 04 (Turaco) and Block 05 (Ngaji). The bidding process will run for five months. The licensing round is scheduled to conclude by December 2020, with successful firms set to receive Petroleum Exploration Licenses.
Total, CNOOC and Tullow Oil jointly own the Kingfisher and Tilega fields and the Ugandan government is in negotiations with Tullow to reduce its stake in the projects and allow final investment decisions to be concluded.
The company indicated in its trading update that, joint venture conversations with the government of Uganda are ongoing and Tullow remains committed to reducing its equity stake in the project ahead of a final investment decision.
However, sources reveal that after securing the ESIA from the Ugandan government CNOOC officials are poised to kickoff explorations in their section of the oil fields as soon as possible, as they wait for the Ugandan government, Total and Tullow Oil to settle their differences.