By Spy Uganda
As reported earlier, Uganda began oil exploration in two new locations, which the country believes would increase its known reserves beyond the existing 6.5 billion barrels.
Uganda’s Energy Minister Ruth Nankabirwa noted that exploration is presently being carried out by government geologists in two new areas in northern and northeastern Uganda, signaling a very promising development towards the country’s oil ambitions.
Prior to this, Uganda earned an additional Shs44 billion in oil revenue from taxes during the fiscal year ending June 30, 2023.
According to the Petroleum Fund Report during the year, Uganda collected Shs 125.9 billion in oil tax receipts, a 54% increase over the previous year’s Shs81.9 billion.
The report also revealed that tax revenue had the largest percentage of the entire revenue at 94% (Shs 118.6 billion), while non-tax revenues came in at 6% (Shs7.4 billion).
New Oil Wells
In the latest development, Uganda via its Energy Minister revealed that it had completely drilled 74 oil wells.
Nankabirwa says that the wells were drilled in the Tilenga and Kingfisher production areas.
Joint venture partners TotalEnergies E&P Uganda, China National Offshore Oil Company (CNOOC) Uganda Limited, and Uganda National Oil Company made a final investment decision in 2022 to execute several kinds of upstream projects for the government.
“Sixty-three out of the planned 426 wells have been completed (at the Tilenga project) with positive hydrocarbon shows in the targeted reservoirs,” said Nankabirwa.
“Drilling activities have been focused on six of the 31 well pads that will host the 426 producer and injector wells for the Tilenga project. All three rigs designated for drilling are operational and 63 wells have been drilled as of August 16, 2024,” she added.
The Minister also revealed that 7 other oil wells are almost done, at about 85% completion. Nine of the eleven oil wells necessary for the initial crude production at the CNOOC Uganda Limited-operated Kingfisher oil field have already been drilled.
The World Bank, earlier this year, in a report titled “The Global Economic Prospect 2024,” projected that Uganda’s economy is set to go from 5.3% in 2023 to 6.0% in 2024. This growth according to the World Bank’s report would result from infrastructure investment ahead of new oil production in 2025.
The expansion of Uganda’s oil industry is expected to drive investment growth, with projects like the $10 billion Lake Albert Oil Project and the $4 billion East Africa Crude Oil Pipeline garnering major inflows.
Fixed investment will contribute 2.2 percentage points (pp) to headline growth in 2024, which is somewhat lower than the 2.5pp contribution predicted in 2023. This is predicted to maintain demand for imported capital inputs high, resulting in a real import growth rate of 9.2% in 2024.
An oil refining project in the Hoima District is also expected to add to this economic development.
