Ugandan Minister reveals country’s plan on first oil production in 2022

Uganda has a plan to commence producing oil in 2022, a year later than its previous target for 2021. The postponement is done due to reported lack of infrastructure and disagreements over taxes and plans with operators.

According to Uganda’s Energy Minister, Irene Muloni, a final investment decision for the refinery would be made in September 2020 and it is planned to be ready three years late. Uganda discovered crude reserves more than a decade ago but production has been repeatedly delayed by disagreements with field operators over taxes and development strategy. A lack of infrastructures such as a transportation pipeline and a refining facility has also held up output.

“Production we are now looking at by 2022, our first production, from Kingfisher and Tilenga blocks,” Irene Muloni told Reuters on the sidelines of the Petrotech conference.

“We are preparing for production. We have to build a pipeline for exports and a refinery to add value. So unless those two projects are done we can’t start producing,” she added. Uganda already signed a deal with a consortium in April 2018, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost between USD 3 and 4 billion. The refinery is expected to be in full operation by 2023.

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