Uganda’s ambitious oil and gas sector is steadily advancing towards commercial production, following the landmark Final Investment Decision (FID) made in 2022 by joint venture partners—TotalEnergies E&P Uganda, China National Offshore Oil Company (CNOOC) Uganda Ltd, and Uganda National Oil Company (UNOC). This major milestone set in motion several flagship projects in both the upstream and midstream sectors, with a combined investment exceeding US $20 billion.
In the upstream sector, Uganda is making strides in both exploration and production. The government continues its efforts to discover new petroleum resources and enhance the existing reserves, which currently stand at 6.5 billion barrels, with 1.5 billion barrels deemed recoverable. Since 2017, companies like Oranto Petroleum Limited and Armour Energy Uganda Limited have been conducting technical studies in their respective contract areas. Recent exploration licenses have also been granted to Uganda National Oil Company and DGR Energy Turaco Uganda SMC Limited for the Kasuruban and Turaco areas, signaling ongoing momentum in exploration.
Additionally, the Ministry of Energy and Mineral Development has initiated preliminary exploration studies in the Moroto-Kadam and Kyoga Basins, with promising results indicating potential commercial oil and gas reserves in the Moroto-Kadam Basin.
On the development and production front, the Tilenga Project, located in the Nwoya and Buliisa Districts, is making significant headway. Sixty-three of the planned 426 wells have already been drilled, with development plans for a Liquefied Petroleum Gas (LPG) facility currently under government review. Civil works in the Tilenga Industrial Area are nearly complete, setting the stage for further advancements.
Similarly, the Kingfisher Development Area Project in Kikuube District, operated by CNOOC Uganda Limited, has seen substantial progress. Nine out of the required 11 wells for First Oil have been successfully drilled, with various engineering and construction packages making steady advances.
In the midstream sector, the East African Crude Oil Pipeline (EACOP) project is moving forward with civil works underway in both Uganda and Tanzania. The thermal insulation plant in Nzega, Tanzania, was completed and commissioned in March 2024. Land acquisition for the project is nearly complete, with 95% of affected persons compensated, marking a key milestone for the project.
The Uganda Refinery Project is also progressing, following the signing of a Memorandum of Understanding (MOU) in December 2023 between the Ugandan government and Alpha MBM Investments LLC from the UAE. Negotiations for key commercial agreements are ongoing, with the project poised to significantly boost economic growth and national revenue once implemented.
Additionally, the development of the Kabalega Industrial Park (KIP) in Hoima is well underway, with the airport construction 95% complete and several other infrastructure projects in various stages of development.
The economic impact of these projects is already being felt. Contracts worth US $5 billion have been awarded for the Tilenga, Kingfisher, and EACOP projects, with 41% of these contracts allocated to Ugandan companies. The oil and gas sector currently employs over 14,000 people, with 90% being Ugandans, reflecting a strong commitment to local content and ensuring that significant benefits from these projects remain within the country.
In her statement, Dr. Ruth Nankabirwa Ssentamu, Minister of Energy and Mineral Development, emphasized the transformative potential of these developments: “Uganda’s leap in economic growth is partly based on the development of its oil and gas resources, which, once commercialized, will significantly impact all Ugandans.” She further highlighted the Ministry’s commitment to ensuring that the sustainable development of petroleum resources aligns with the dynamic global environment.
Uganda’s journey towards becoming a significant player in the global oil and gas industry is well on track. The projects in place are not only poised to boost the country’s economic growth but also to bring substantial benefits to its people. The Ministry of Energy and Mineral Development remains committed to balancing economic growth with social development and environmental conservation as the country continues on its path to prosperity.
