News24

Uganda oil bonanza growing

2014-08-29 22:29

Kampala - Uganda's estimated oil reserves have almost doubled to more than 6.5 billion barrels based on new estimates by international oil companies prospecting in the East African country, the Energy Ministry said on Friday.

Commercial oil deposits were first discovered in the north-western Albertine Graben region in 2006, and deposits of some 3.5 billion barrels were confirmed two years ago.

"The increase in the estimated petroleum resources is a result of the evaluation of the data and information acquired by the oil companies during the ongoing appraisal of the discoveries in the Albertine Graben," the ministry said in a statement.

"Of this estimated 6.5 billion barrels of oil in place, 1.4 billion barrels of oil are estimated to be recoverable," it added.

Several companies including Total and London-based Tullow are prospecting for oil in Uganda, but only the China National Offshore Oil Corporation (CNOOC) already has a production licence.

Uganda has not yet started producing oil, but the government has laid out ambitious plans to develop the oil industry. A refinery that is being built in the north-west is due to start producing about 60 000 barrels daily in 2017.

The known oil reserves could increase considerably, according to the ministry. "Exploration work has only been undertaken in less than 40% of the Albertine Graben, which is the most prospective sedimentary basin in the country," it said.

The oil discoveries have raised hopes that Uganda could eventually follow the lead of Africa's top oil producers such as Nigeria, Algeria and Angola.

Reserves of 500 billion cubic feet of gas, which can be used in electricity generation and production of liquefied petroleum gas, have also been discovered.

In October 2011, Uganda's parliament suspended all new oil transactions after it was alleged that three cabinet ministers had received millions of dollars in bribes from Tullow. The suspension lasted less than a year. The three ministers were not charged and are still in government.

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