According to the Ministry of Energy and Mineral Development, all necessary infrastructure is almost finished, which would allow Uganda’s oil and gas industry to be commercialized.
Energy Minister Ruth Nankabirwa disclosed that talks with Alpha MBM Investments LLC about the refinery project are almost finished.
As of right now, 63 of the 426 intended oil wells on Total Energies’ Tilenga project have been successfully completed through drilling. Nine out of the eleven wells needed for first oil on the Kingfisher escarpment have been drilled successfully.
The sector’s major infrastructure projects are proceeding according to the Ministry of Energy and Mineral Development’s confirmation.
According to Ugandan officials, the East African Crude Oil Pipeline will be used to transport part of the nation’s petroleum resources, while others will be refined on-site. By the time of the first oil production in 2025, the Ministry of Energy is optimistic that the refinery will be up and running.
“A Memorandum of Understanding (MOU) for the development of Uganda’s refinery was signed by the Government with Alpha MBM Investments LLC from the United Arab Emirates in December 2023,” according to Nankabirwa.
The Implementation, Crude Oil Supply, and Shareholders Agreements between the Government and Alpha MBM Investments LLC are among the major commercial agreements that are still being negotiated, she continued. These talks started in January 2024 and are still going on today.
Following the completion of these agreements, the consortium is anticipated to start project implementation right away.
“These initiatives are essential to Uganda’s goals of increasing oil production, propelling economic expansion, and producing substantial national income,” Nankabirwa underlined.
Of the US$ 7.2 billion approved by the Petroleum Authority of Uganda, contracts worth US$ 5 billion have been given for the Tilenga, Kingfisher, and EACOP projects. Notably, US$ 2 billion, or 41% of all contracts awarded, have gone to Ugandan businesses.
14,451 persons were directly engaged in this sector; 13,048 (90%) of them are Ugandans.
Uganda has begun utilizing the Tanzanian method instead of direct gasoline imports, which has caused some worry about possible hikes in gas prices. The Ministry thinks that if Oil Marketing Companies use fair pricing, local pump costs will decrease over the medium run, even though petroleum prices are affected by conditions in the worldwide market.
Between July 2 and July 4, 2024, the ship MT Martinez received the first shipment of UNOC petroleum products, consisting of 58,330 metric tons of gasoline, while the ship Sinbad received 79,968 metric tons of diesel.
The Ministry reaffirmed that although local costs are predicted to drop in the medium term, pump prices remain tied to situations in the global market.
