Tullow says investments in Uganda oil sector has hit $1 billion
BY NICHOLAS BARIYO
KAMPALA Uganda -- UK-based Tullow Oil has invested at least $1 billion in the exploration of oil and gas in Uganda, leading to the discovery of over a billion barrels of recoverable oil reserves, with an estimated 1.5 billion barrels expected to be found in three exploration blocks, the company announced Tuesday.
In a statement, Tullow, which has been operating in Uganda since 2006, said the investments have been made in seismic and drilling activities, and "this level of resource could place Uganda in the top 50 oil producers in the world."
Last week, Tullow completed the long-awaited $2.9 billion sale of part of its interests in the three oil blocks in the country to France's Total SA (TOT) and China's CNOOC Ltd. (CEO) which is expected to unlock investments worth $10 billion to develop the country's oil fields.
Tullow said it would continue working with the Ugandan government and local communities in the development of the country's nascent oil industry.
"We believe in developing capacity for Tullow and for sustainable development and management of Uganda's oil and gas industry," the company stated.
Uganda is expected to commence phased oil production next year, starting with around 20,000 barrels of oil a day, peaking at around 180,000 barrels a day by 2018, according to Fred Kabagambe Kalisa, the permanent secretary at Uganda's energy and minerals ministry.
Tullow, Total and CNOOC are expected to build a single oil processing unit in the Lake Albertine rift basin, along the country's western border with Congo. Moreover, a $1.5 billion barrels-a-day refinery and a 1,300 kilometer-long pipeline are expected to be constructed to support an oil export project.
Oil exploration has only been conducted in 40% of Uganda's Albertine Graben (a depressed block of land bordered by parallel faults) and reserves are expected to increase to as much as 6 billion barrels with more exploration activities, according government geologists. The Albertine Graben is located in the western area of the country, situated at the Uganda and Congo border.
Dow Jones Newswires