Uganda granting production licenses to support future refinery
(Reuters) The country’s prospective 60-Mbpd refinery will reserve the right of priority access to the Ugandan crude, and the remainder will be exported via a crude pipeline to the Indian Ocean port of Tanga.
Uganda has granted five production licenses to UK-listed explorer Tullow Oil, and three to France's Total, clearing a major hurdle as the east African country moves toward increased energy independence and domestic production. The licenses are valid for 25 years with a renewal option for an additional five years.
Tullow and Total are required to make final investment decisions 18 months after receiving the licenses and commercial oil production is expected to begin in 2020.
Tullow and Total are expected to invest a combined $8 B in the infrastructure required to support oil production, including drilling 500 wells and erecting central processing facilities and feeder pipelines. Once production begins, the combined output from all the licensed areas is estimated to be between 200 Mbpd–230 Mbpd.
Commercial oil reserves were discovered in Uganda a decade ago, but production has been repeatedly delayed amid wrangling over taxation and field development strategy.
Uganda has an estimated 6.5 Bbbl of reserves in its fields located near its border with the Democratic Republic of Congo, according to estimates by government geologists.
Reporting by Elias Biryabarema; Editing by George Obulutsa and Mark Potter
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