Minister of Energy and Mineral Development, Irene Muloni has Friday confirmed that Uganda’s first Oil will be produced in 2021/2022 contrary to the 2020 deadline that Government had set earlier.
The extension and delay according to Minister Muloni is to ensure that Uganda receives the most benefits from its oil once production begins.
Muloni said government is still waiting for the oil companies to make their Final Investment Decision (FDI) which will then determine when the actual construction of the oil pipeline and actual oil production will begin.
According to the Minister, the Oil companies, Total E &P, Tullow Oil and CNOOC have expressed commitment to make the FID in June 2019 and the construction of the pipeline is expected to begin immediately after that.
“Our oil is still in its nurture host and no one is charging us for storing it. However, for us to start pumping it out, we need to have where to store it. We decided that we needed to add value to the crude oil and locally produce Diesel and petrol that we have been importing. This is intended to maximize benefits to Ugandans. We however, also want to export our oil. We are waiting on the Oil companies to make the final decision, so that the selected oil pipeline passage from Hoima to Tanga is started on” she said.
The Minister added that after the decision is made, the companies will need 3 to 4 years to put the infrastructure in place before the actual production begins which might push the first oil to even go beyond 2022.
“We are taking our time so that we do not make any mistakes, we want to make a good deal for Ugandans, there is no sense in rushing to produce the first oil and then we end up like some oil countries that made decisions first but suffered later,” she said.
The Minister was speaking at the official opening of the first National Content Conference for local suppliers hosted by Petroleum Authority of Uganda (PAU) at speak Resort Munyonyo.
The Minister asked local Suppliers to focus on creating partnerships with bigger companies so as to improve their competitiveness and chances of winning bids.
The conference brought together all Ugandan companies that have expressed interest to supply to the oil and gas sector so as to share experiences, challenges and opportunities and maximizing the opportunities.
In his opening remarks, the Executive Director PAU, Ernest Rubondo Said the conference creates a platform for the stakeholders to take stock of the journey that successful Ugandan companies have gone through so that they can act as an example for other local companies.
“It also gives a platform to share lessons learnt and the expectations of the oil companies from the potential suppliers in terms of quality, timeliness, health and safety factors” he said
The conference was attended over 800 private suppliers, oil companies’ officials, government officials in the oil sector