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Uganda’s Oil & Gas Sector To Attract Investments Worth Shs10.5 Trillion In 2022-Gov’t

Ernest Rubondo, the Executive Director at Petroleum Authority of Uganda addressing the press

Investments in the oil and gas sector are expected to grow to US$ 3 billion (Shs10.5 trillion) in 2022, Ernest Rubondo, the Executive Director at Petroleum Authority of Uganda (PAU), has said.

During PAU’s annual media briefing held in Kampala on Tuesday, Rubondo attributed the projection to the significant increase in the activities in the sector following the conclusion of the required agreements in oil related projects.

“With this momentum, 2022 is going to see a beehive of activity for the oil and gas sector, the Ugandan economy, and the region at large. The contracting and land acquisition processes will be concluded, and the work on the ground will intensify, with the commencement of development drilling of the planned 450 wells in the second half of 2022.   The year 2022 is going to commence the period of three years of intense infrastructure development in preparation for first oil in 2025,” Rubondo said.

He revealed that Uganda registered investments worth US$180 million and US$ 500 million in 2020 and 2021 respectively.

Between 2020 and now, Uganda has seen the launch of contracts worth US$ 6 million for over 40 work packages while contracts for Tilenga, Kingfisher and EACOP projects have been submitted by the licensees to the PAU for approval before award.

Despite the interruptions of the Covid-19 pandemic, Rubondo says that the country’s oil and gas sector “progressed very successfully and registered critical and important milestones during this period.”

Some of these achievements, Rubondo said are: Conclusion of the agreements required to take forward oil projects in the country including the East African Crude Oil pipeline, launching of Uganda’s oil and gas projects in April 2021, the passing of the bills (Income Tax Amendment, Public Finance Management Act and the EACOP bill 2021 among others), the National Environment Management Authority (NEMA) awarding the Environment and Social Impact Assessment Certificates to Kingfisher and EACOP, US$ 230 million investments in 2019 US$ 180 million in 2020, US$ 500 million in 2020, acquisition of land for setting up the infrastructure for the production, processing and transportation of the oil and having many more Ugandans employed directly and indirectly in the oil and gas sector among other achievements.

Rubondo says that over the last two years, Ugandans have been able to provide goods and services worth over US$ 1 billion out of the total investment of US$ 3.6 billion as at the end of 2021.

The expected investments into the oil and gas sector in the next 3 to 4 years is expected to be US$ 15 billion (to be spent before oil comes out of the ground).

According to Rubondo, the country is on course to deliver the first oil out of the ground by early 2025. Companies licensed for exploration continue with the implementation of the agreed exploration work programmes which include acquisition of 108-line kilometre of 2D seismic data in Kanywataba Exploration area by Armour Energy and development of a lake drilling solution for the Ngassa Exploration area by Oranto Petroleum Limited.

“Preparation for drilling of wells in the two areas is ongoing and, therefore, petroleum exploration wells are expected to be drilled in these exploration areas during the current licence period which will expire during 2023,” Rubondo said.

Tilenga and Kingfisher projects are expected to produce a total of about 874 million barrels with a peak production of 190, 000 barrels per day.

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