Uganda has started drilling operations on its first commercial oil discovery. The East African country has secured the first of the 4 platforms planned to operate the discovery, and has already started drilling its 1st commercial well in hopes of achieving first oil production by 2025.
The Kingfisher oil field in Kikuube District is operated by the China National Offshore Oil Corporation, CNOOC, but is co-owned by TotalEnergies and Uganda’s state oil company, UNOC. The project suffered several delays after Uganda discovered the reserves nearly 20 years ago.
The head of the regulatory authority for the oil sector in Uganda, Ernest Rubondo, described that the start of drilling activities at the Kingfisher prospect represents a historic milestone for the country, as it marks the first step towards the production of the first oil in the Uganda.
Breakeven costs are expected to be $22/BBL, with peak production expected to be around 230 KBPD.
On the other hand, construction of the pipeline nearly 900 miles from East Africa will also start this year, a project planned by CNOOC and TotalEnergies, which has been described as the longest heated pipeline in the world. Completion of the infrastructure is also scheduled for 2025. Total holds a 62% stake in the pipeline project, with UNOC and CNOOC holding 15% each.
Construction of the pipeline was resisted by the EU parliament last year, which asked the Ugandan authorities to suspend the development of the said project, aimed at protecting the environment and ending extractive activities in protected and sensitive ecosystems, including the banks of the Lake Albert.
Uganda also intends to develop its refining business, with the implementation of a refinery with a capacity to process 60 KBPD, scheduled to be built in the west of the country, although it has also suffered several delays.
