UNOC to become sole provider for oil and gas in Uganda

Ruth Nankabirwa, the Minister of Energy, has announced that starting in January 2024, all of Uganda's oil and marketing companies will procure their fuel and gas products exclusively from the Uganda National Oil Company (UNOC).

This decision aims to stabilize fuel supply within Uganda and reduce reliance on Kenya.

"To ensure a stable supply and improve pump prices, my Ministry is backing UNOC to become the sole supplier to all Oil Marketing Companies in Uganda. Starting from January 2024, UNOC will directly supply Uganda's Oil Marketing Companies, which will enhance supply security and result in highly competitive pump prices," stated Nankabirwa.

In addition to this, Members of Parliament (MPs) have urged Nankabirwa to assure Ugandans that the country will witness its first oil production by 2025.

Concerns arose after the Minister informed Parliament that the government and its partners are diligently working towards achieving first oil by the end of 2025, while MPs questioned the previous target of May 2025.

Emmanuel Otaala, MP for West Budama South, expressed his concerns, stating, "She previously mentioned that we expected the first oil by May 2025, but in the Minister's recent statement, she mentioned the end of 2025. This raises questions regarding a possible shift in the roadmap, and we need clarification on this matter."

The Minister attributed the change in the timeline for first oil to the efforts of Civil Society groups that have actively campaigned against Uganda's oil projects.

However, she assured Parliament that the government has restored stability in the sector and is actively working to ensure that the project is delivered within the set timelines.

"The funding for EACOP has faced challenges due to the de-campaigning efforts by Civil Society Groups. These factors have caused us to revise the deadlines. As you are all aware, there has been a negative campaign against fossil fuel development worldwide, but we have been countering it, and I am pleased to note that the situation has now calmed down. We are progressing with developments both in the upstream and downstream sectors," explained the Minister.

The minister also criticised Western nations that have tried to dissuade Uganda from venturing into oil production under the guise of environmental protection.

She pointed out that these nations lack the authority to lecture Uganda, considering their own reliance on coal following the gas crisis they are currently facing.

"God is fair. The world is currently suffering from gas insecurity in America and Europe. So, where do you get the audacity to tell Uganda not to develop its petroleum resources? These are the factors that have caused delays in announcing the final investment decision," she strongly asserted.

Earlier this year, Uganda initiated its first oil drilling program, marking a significant milestone in the country's race to achieve first oil output by 2025.

The Kingfisher field, situated under Lake Albert in the western part of the country, is part of a $10 billion project to develop Uganda's oil reserves.

The project also includes the construction of a vast pipeline to transport the crude to international markets through a port in Tanzania on the Indian Ocean.

The China National Offshore Oil Corporation (CNOOC), a state-owned company, operates the Kingfisher field, which is expected to reach a peak production rate of 40,000 barrels of oil per day.

Another project area, Tilenga, located north of Lake Albert along the River Nile, is operated by TotalEnergies, a French energy company.

CNOOC, TotalEnergies, and the Uganda National Oil Company (UNOC) jointly own all of Uganda's existing oilfields.

Uganda plans to produce approximately 230,000 barrels of crude oil per day at its peak production level.

The country's estimated crude oil reserves amount to 6.5 billion barrels, with 1.4 billion barrels considered recoverable.

However, the plans to extract oil from Lake Albert, a 160-kilometer (100-mile) long body of water that separates Uganda from the Democratic Republic of Congo, have faced strong opposition from human rights activists and environmental groups.

These groups argue that the project poses a threat to the delicate ecosystem of the region and the livelihoods of tens of thousands of people.

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