PM Mbabazi: Uganda Will be Ready for Oil Production by 2016

Prime Minister Amama Mbabazi has told Parliament that Uganda will be ready for oil production in 2016 and that both the oil refinery and pipeline will be complete by 2017.

 

Mbabazi said this during his weekly question and answer session in parliament where Bulisa County MP Stephen Mukitale Birawha asked why Uganda has taken long to enter the commercialisation stage of its oil resource.

 

Mukitale tasked the Prime Minister to give Parliament a comprehensive roadmap of the oil sector or an inter-ministerial activity that outlines what government will do and what the oil companies will do.

 

Mukitale wondered why the government is very slow to fast track the resource when neighbours like Kenya and Ghana are already benefitting from the resource yet they made discoveries later than Uganda.

 

He said that the sector would help address problems like unemployment and budget deficits amidst donor cuts by development partners saying that government should harness this resource rather than begging donors.

 

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Mbabazi said that the slowness in the management of the resource has been for a good cause saying that government is determined to first build internal capacity to be able to handle the sector and not depend on expertise from foreigners.

 

He also said that government’s determination to refine its oil which was not readily accepted by the investors also created delay. He said that after several arguments with the investors, it was agreed that a refinery be constructed and said both the refinery and the pipeline are expected to be ready in 2017.

 

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Mbabazi assured parliament that production will soon begin saying that government has already signed a commercialisation plan with the oil companies.

 

 He said that the two companies which have not been given production licenses-Total and Tullow Uganda are being evaluated and expects that the evaluation process will be concluded soon for them to be grated the production licenses.

 

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Chinese Company CNOOC was the first to be granted a production license in September 2013 for the Kingfisher oil field.

 

Uganda confirmed commercial oil deposits in 2006 but eight years later, the country is yet to reach the production stage with the sector marred by allegations and counter allegations of corruption.