In 2022, the Ugandan economy is expected to benefit from a raft of foreign investments ultimately intended to make the country a commercial oil producer within the next three to four years.
Backed by a government policy to encourage local participation, Ugandan companies could earn up to $1.5 billion from contracts associated with the development phase in the Kingfisher and Tilenga oilfields as well as the construction of the East African Crude Oil Pipeline (EACOP) and Kabaale Petrochemical city.
The $3.5 billion EACOP will connect the oilfields in western Uganda to the Tanzanian seaport of Tanga while the Kabaale complex will become the processing hub of Uganda’s budding oil and gas industry. An international airport is also nearing completion.
In a recently published report, Uganda Tilenga Project Development Stage and East Africa Crude Oil Pipeline (EACOP) Outlook 2021 – 2025 Nairobi-based analysis firm, OilNews Africa, provides a detailed look into the various aspects of the development phase starting with the nine proposed oilfields and the supporting facilities such as workers’ camps.
The report is the first free industry outlook for Uganda’s upstream sector, highlighting the activities of current leading players, TotalEnergies (Tilenga) and China National Offshore Oil Corporation Uganda Limited (Kingfisher).
OilNews Africa Lead Researcher, Mwambia Mbote said, “We have since inception envisioned a platform that would open up the oil and gas sector and level the field for local players who see great potential in this area, but lack the know-how on ways to engage.
He said, “This outlook allows local businesses in Uganda to be part of this multi-billion dollar development phase at all levels including in various segments that have been ring-fenced for local companies.
We do believe that local companies can be involved through all levels (technical, skilled and unskilled) through mutually beneficial joint ventures with international companies.”
According to the report, Uganda has already taken the early steps in the development phase. The engineering, procurement, construction, and commissioning (EPCC) services contract for the Tilenga Project was awarded to a consortium made up of a subsidiary of McDermott International Limited and China’s Sinopec International.
Located in the Lake Albert Basin, the Tilenga project comprises six oilfields and 426 planned oil wells. It will consist of 31 well pads connected to a central processing facility (CPF) via buried flow lines.
This is the centerpiece of the oil projects and together with other related infrastructure will attract total investments of about $15 billion to Tanzania and Uganda.
The report looks into initial project schedules, including assessments of first dives into the expected contracts during the first six months and overall project timelines.
It also addresses the preliminary well pad schedule for the three rigs as well as services and goods to be provided by Ugandan companies.
This is particularly important as the government pushes for local content in the project and the license holders promise to involve local enterprises as a way to acquire a social operating license.
Furthermore, in cases when two bids are very close, the winning bid is reserved for the company with the highest score on Local Content.
Notable insights provided by the report, also include the unbundling of other support infrastructure projects namely the planned Kabaale Industrial Park, the proposed refinery, and the EACOP.
Under the EACOP construction phase, the report looks at the route, design, and planned facilities while analyzing the cost-benefit ratio of the refinery.
Lastly, the report highlights the technical attributes of the EACOP and Tilenga feeder along with the five spreads before concluding with the pipeline characteristics.
Access to reliable information has been frequently cited to be among the five biggest challenges affecting local investors in East Africa wishing to participate in the nascent oil and gas sector.
OilNews Africa believes their report is an essential read for small business owners who are considering taking up the challenge to get involved in Uganda’s oil and gas sector.
To download the free report use this link: https://bit.ly/3JBszPg
For further information, kindly contact:
Samuel K. Mbote