Museveni Commissions CNOOC’s Drilling Rig, Vows to Develope Uganda's Oil

President Yoweri Museveni commissioned the first of the oil drilling rigs in the Albertine’s Kingfisher area operated by Uganda’s oil Joint Venture partner CNOOC.

The event which took place in Buhuka Kikuube district on Tuesday has been described as one of the major milestones as the Chinese developer promised to deliver first oil by 2025.

CNOOC plans to use the commissioned rig to dill part of the 31 well pads from which oil will be extracted once production kicks off. The President said Uganda will continue to develop its oil and gas resources alongside other sources of energy.

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President Museveni used the occasion to allay fears that the Oil being developed by Uganda may not be marketable given the debate to shift from fossil fuels to cleaner energy options.    

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Uganda's crude reserves are estimated at 6.5 billion barrels, of which 1.4 billion barrels are recoverable. According to the President, the 6.5 billion so far discovered is less than half of the area under exploration.

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Kingfisher Oil field which is operated by China National Offshore Oil Corporation (CNOOC) Uganda Limited, on the shore of Lake Albert.

Others are a planned central Processing Facility (CPF) with a capacity of 40,000 barrels of oil per day and 31 oil wells to be drilled on 4 well pads, 16 kilometres of flow line,s and a55-kilometere feeder pipeline from the central processing facility to the export hub and the proposed oil refinery at Kabaale parish in Hoima district.

Twenty of these wells will be used to produce oil while 11 of the wells will be used to inject water in the reservoir to help improve production.

Museveni commended the oil companies and scientists that have made everything possible to ensure Uganda begins developing its oil.

"We started with smaller companies and subsequently got big firms like CNOOC and TotalEnergies. I particularly thank CNOOC because they are moving and I hope others are also moving. And the Chinese government for encouraging their company to come and invest here. We have been working with them since 1950s in liberating our people and now we are in economic cooperation for mutual benefit,” Museveni said.

“I also thank the government of France because I have not heard them making trouble apart from European Parliament which I told to go to hell.”

The commissioning of the drilling rig for the Kingfisher Development Project(KDF) has sent excitement among sections of Ugandans. Some think oil production should begin in the coming weeks. Some have wondered why CNOOC should begin drilling when the construction of the refinery meant to refine crude oil from King Fisher and Tilenga projects has not begun.

And equally when the East African Crude Oil Pipeline meant to export crude to the international market has not taken off. Others have asked where the crude oil will go in the absence of the two commercialization projects inform of the pipeline and the refinery.

The Executive Director of the Petroleum Authority of Uganda (PAU), Earnest Rubondo explained that in order to produce the volumes that are expected from the Kingfisher and Tilenga projects, drillings of the wells for production have to be done in advance.

Those volumes require production from many wells. So you need to start drilling these wells early. So that when the day of production reaches, you begin to have production from the different wells. So according to Rubondo the drilling that has been commissioned is for the first production well that will produce oil in the Kingfisher field.

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According to Rubondo, the s brand new state-of-the-art rig was specially designed for the Kingfisher field and is the strongest that has been used in the country to date, consuming about 6 megawatts of power.    “It has the capacity to drill up to 8 km long, with noise-suppressing technology making it more environmentally friendly.” Said Rubondo

  He said the wells to be drilled in the Kingfisher field will vary from 2600m to 7400 metres in length depending on how far the targeted part of the reservoir is from the location, where the drilling will start.

Rubondo revealed that investment in the development of the Kingfisher oilfield is expected to cost over US$2 billion over the next 3 years until shortly after production starts and over US$1.5 billion over the remaining 20 years of the life of the oil field.

"US$ 346 Million was invested in the Kingfisher project in 2022 bringing the total cumulative investment in the project to US$ 1.07 billion at the end of 2022. About $580 Million is expected to be invested in KFDA in 2023 and a similar amount in 2024," he said

Rubondo said the recoverable cost of Kingfisher oil field is $22 per barrel compared to international standard of $25 per barrel and will account for the 15% of the total revenues the government expects to get from oil.Peter Banura, the Kikuube district chairperson, asked the government to invest back oil revenues into developing the area to befit an oil-rich area since they are the ones to be directly impacted by its extraction.

Construction of the Kingfisher project is being undertaken by a joint venture of China Offshore Oil Engineering Company and China Petroleum and Construction Corporation.

Petroleum Authority of Uganda granted CNOOC Uganda Limited Consent to Drill the first three production wells of the Kingfisher field after reportedly fulfilling the legal and regulatory requirements which include, preparation and submission of a geological well proposal, and submission of a drilling program.   The PAU was according to Rubondo satisfied with technical aspects of the drilling rig and with CNOOC’s measures to ensure the safety of persons, equipment, The and the environment.