Kampala, Aug 21—Uganda is exploring for oil in two new regions where potential discoveries of crude could increase the East African country’s proven reserves of 6.5 billion barrels, its energy minister said on Wednesday.
Commercial quantities of crude oil were discovered in the Albertine Graben basin in Uganda’s west near the border with the Democratic Republic of Congo nearly two decades ago, but production is not projected to start until next year.
Government geologists are exploring two new regions located in Uganda’s north and northeast, Energy Minister Ruth Nankabirwa told a press conference in the capital Kampala.
“The ministry is conducting preliminary petroleum exploration studies in the Moroto-Kadam Basin to assess its oil and gas potential. Similar surveys have started in the Kyoga Basin,” she said, referring to the two new regions.
“Early results suggest the potential for commercial oil and gas in the Moroto-Kadam Basin.”
Uganda has five basins where hydrocarbon potential is suspected, with only one, the Albertine, successfully explored so far, the energy ministry says.
The two oil fields in the Albertine basin – Tilenga and Kingfisher – are majority-owned by Total Energies with a 56.7% stake, while China’s CNOOC and the Uganda national oil company UNOC own the remaining share.
Commercial production has been delayed by various factors including disagreements with oil firms over field development strategy and taxation, and a lack of infrastructure and funding to develop it.
Only 72 of 457 planned wells have been drilled in the Tilenga and Kingfisher oilfields, Nankabirwa said, and oil firms had submitted a plan for a liquefied petroleum gas (LPG) facility for which the government planned to issue a license.
The government expects a decision next month from Chinese funders, including EXIM bank [RIC:RIC:EXIMC.UL] and SINOSURE, that Uganda has been wooing to provide credit for the proposed East African Crude Oil Pipeline (EACOP), Nankabirwa said.
The 1,445-kilometer (895-mile) EACOP will help Uganda export its crude via a port on Tanzania’s Indian Ocean coast.
