By Nangayi Guyson
Kampala-The Ugandan government said on January 4, 2023, the east African nation will start producing crude oil from its oil fields starting 2025.
President Yoweri Museveni said this while launching the commencement of well drilling activities at the Kingfisher oil fields in western Uganda.
The Kingfisher Project, according to the president, shows that "Africa is more in control of its own destiny and does not rely on other countries to advance its economic development."
Drilling of the over 400 wells needed to develop and exploit the oil resource in the Lake Albert Rift Basin began on this day. There will be 31 of these in the Kingfisher oil field, with the deepest well measuring 7.4 kilometers.
There are thought to be 560 million barrels of oil in the field overall, of which 190 million barrels (or 33%) are anticipated to be produced over the course of 20–25 years.
For the following three to four years of development, drilling will take place.
Along with the construction of other infrastructure, this will be carried out.
The oil will be transported from Chongoleani, Tanga in Tanzania to Kabaale, Hoima in Uganda via the EACOP pipeline, which is currently being completed.
The Petroleum Authority of Uganda (PAU) ED Ernest Rubondo congratulated CNOOC International, one of the country's largest oil and gas companies, as well as joint venture partners Total EnergiesUG (Total) and Uganda National Oil Company (UNOC), for reaching the milestone on the road to the country's first oil production.
Less than a year following the announcement of FID, the business is currently starting the drilling of production wells, according to Rubondo.
"Your Excellency, the drilling rig you just turned on will be used to drill all 31 production wells that this oil field has planned. While 11 of these wells will be used to inject water into the reservoir to aid increase production, 20 of these wells will be used to generate oil, according to Rubondo.
The brand-new, cutting-edge apparatus was created especially for this field.
With over 8000 horsepower and using 6 megawatts of power, it is the strongest device now in use in the nation.
Throughout the next three years, up until just before production begins, and up to US$1.63 billion over the remaining 20 years of the oil field's life, investments in development of the Kingfisher oilfield are anticipated to total over US$ 2 billion.
The Kingfisher project received US$ 346 million in investment in 2022, increasing the project's total cumulative investment to US$ 1.07 billion.
In 2023, KFDA is anticipated to receive investments totaling $580 million.
At the present price of oil, which is around $87.5 per barrel, the Kingfisher project will contribute around 15% of the government's overall upstream oil earnings, or $6.9 billion in total and $360 million annually.
The Kingfisher oil field is located about 2 km below Lake Albert and is roughly 15 km long and 3 km broad.
For the first five years, the oil field is predicted to produce a maximum of 40,000 barrels per day before production starts to fall.
Development wells, water injection wells, and production wells are a few of the wells that are being launched.
Before the start of first oil production in 2025, eight wells are anticipated to be drilled. The remaining wells will be drilled as production moves forward.
Well drilling aids in gathering more information and testing reservoirs for optimal and efficient output.
According to Martin Tiffen, MD of EACOP Ltd., "this is a significant milestone and an essential step forward for EACOP as it symbolizes progress towards the beginning of our construction activities and the ensuing delivery of first oil in Uganda."
Martin Tiffen remarked, "We are grateful to for the speedy delivery of the license in accordance with the Host Government Agreement's (HGA) pledge and for the ongoing support for the seamless implementation of EACOP activities."
There is enthusiasm among some Ugandans following the commissioning of the drilling rig for the Kingfisher Development Project (KDF). Some believe that oil production should start soon. Some have questioned why CNOOC will start drilling when the refinery intended to refine crude oil from the King Fisher and Tilenga projects has not yet started construction.
Similarly, when the East African Petroleum Oil Pipeline, which was supposed to export crude to the global market, has not started operating. Others have questioned what will happen to the crude oil if the pipeline and refinery, the two commercialization projects, are not built.
According to Executive Director of the Petroleum Authority of Uganda (PAU) Rubondo, drilling of the production wells must be done in advance in order to generate the quantities anticipated from the Kingfisher and Tilenga projects.
To produce those volumes, several wells must be in operation.
Therefore, you must begin drilling these wells right away.
In order to start having production from the various wells when the day of production arrives. So, in accordance with Rubondo, the drilling that has been authorized is for the Kingfisher field's initial oil production well.
The CNOOC investment in Uganda's oil reserves, according to Chinese Ambassador to Uganda Zhang Lizhong, is China's largest investment in Uganda.
Zhang expressed confidence that the investment will improve Ugandans' quality of life.
The firm is dedicated to making sure that skills, knowledge, and technology are transferred to Ugandans, according to Chen Zhuobiao, president of CNOOC Uganda.
According to Chen, the corporation would, among other things, award contracts to local businesses to ensure that the local population gains from the oil.
He reaffirmed that the CNOOC would uphold strict environmental protection requirements going forward.
The Kingfisher Oil Development area in the Kikuube district will have its oil waste managed by the Uganda People's Defence Forces through the National Enterprise Corporation.
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