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OIL: Gov’t to Construct Airport in Hoima, Pipeline

A new airport will be built in Hoima to facilitate movement of labour and transportation of logistics in the oil-rich western region of Uganda.

With hundreds of expatriates expected to flock in ahead of the commercial production of oil, rx price government is keen on easing their transport.

The Finance Minister, cost Matia Kasaija, said Thursday that in the financial year 2015/16, Government intends to “fast track infrastructure development for the commercialization of oil, including the development of an airport near the Oil Refinery project site at Hoima.”

The legal framework for the management of Oil and Gas Resources was recently finalised with the enactment of the Petroleum (refining, gas conversion, transmission and midstream storage) Act 2013, the Petroleum (Exploration, Development and Production) Act 2013 and the Public Finance Management Act 2015.

Kasaija said the relevant institutions, including the establishment of the National Oil Company and the Petroleum Authority of Uganda, are also being finalized to ensure prudent management of the Oil and Gas resources.

According to Energy and Mineral Development Minister, Irene Muloni, Uganda has an estimated 6.5 billion barrels of petroleum resources from exploration work in less than 40 percent in the Albertine Graben.

However, less than 10 percent of the Albertine Graben is currently licensed and the six blocks targeted for this maiden licensing round have good data coverage.

Oil investors recently expressed their frustration with government’s failure to expedite the licensing of companies and production of oil.


Uganda Chamber of Mines and Petroleum, (UCMP) chairman, Elly Karuhanga last week said whereas news on the awarding of a refinery contract to RT Global Resources was very exciting, “Government should apply similar decisiveness on the other lacunas in the oil and gas and mining industries, especially the issue concerning the issuance of Production Licenses to the Total E&P and Tullow Plc and the scrapping of taxation on exploration projects.”

Central Bank Governor Tumusiime Mutebile also weighed in on the delays in the oil industry, saying the uncertainties surrounding the future oil prices was a point of concern to the Central Bank – the monetary policy regulator, – Ministry of Finance, and every Ugandan that has high hopes for the big Oil revenues.

“One of our [BoU] forecasters, whom we depend on, had in March 2013 estimated that oil prices would be at $148 a barrel in 2019. But the same forecaster has currently revised his forecast down to $81 for the year 2019,” said the Governor.

Mutebile warned that once this uncertainty continues, foreign companies in the sector were likely to hold back their investments and that that would have serious effects on the country’s anticipated oil production.

“Now we don’t know where the oil process will be in the next 10 years, and this is not good. It involves risks that cannot be quantified.”

Gov’t plans

But Kasaija today said as part of the Refinery development programme, land acquisition for the proposed Oil Refinery at Kabaale in Hoima is almost complete and that the environmental baseline study for the Oil Refinery project has also been concluded.

“The major priority next financial year will be commencement of detailed engineering studies for the Oil Refinery, following the selection of a Lead Investor on a Private-Public Partnership (PPP) basis,” observed Kasaija.

“Government will also continue the exploration and production of oil and other valuable minerals such as Iron Ore and Phosphates, and also concretize the development of the Crude Oil Pipeline to the Indian Ocean and petroleum products pipelines,” he added.

Early this year, Muloni said Government had “undertaken resource and risk assessment of the areas proposed for licensing, developed a data room and is making available data packages to prospective investors in preparation for this licensing round.”

Uganda’s first licensing round is guided by the National Oil and Gas Policy for Uganda (2008) and the Petroleum (Exploration, Development and Production) Act 2013.

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