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At the current oil prices of about $87.5 per barrel, the Kingfisher project will account for about 15% of the total oil revenues to government from upstream, which is $6.9billion in total and $360million per year.
Kikuube, Uganda | THE INDEPENDENT | President Yoweri Museveni has today launched the commencement of well drilling activities at the Kingfisher oil fields in western Uganda.
The President said that the Kingfisher Project proves that “Africa is increasingly in control of its own destiny and no longer needs to rely on other countries to promote its economic development.”
The plan is to produce crude oil from these oil fields starting in 2025.
Today marks the start of drilling of the close to 400 wells in the Lake Albert Rift Basin that are required to develop and produce the oil resource. Thirty one of these will be on the Kingfisher oil field, with the deepest well at 7.4km.
The oil field is estimated to have a total of 560 million barrels of oil in place, out of which,190 million barrels of oil (33%) is expected to be produced over a period of 20-25 years
There will be drilling for the next three to four years of development. This will be done alongside the development of other infrastructure.
The EACOP pipeline that is being built to transport the oil will connect Kabaale, Hoima in Uganda to Chongoleani, Tanga in Tanzania.
The Petroleum Authority of Uganda (PAU) ED Ernest Rubondo congraulted CNOOC International, one of the largest oil and gas companies in Uganda’s energy sector and Joint Venture Partners, Total EnergiesUG (Total) and Uganda National Oil Company ( UNOC) for achieving today’s milestone in the journey towards the production of first oil in Uganda
“The company is now commencing the drilling of production wells less than one year after the announcement of FID,” Rubondo said.
“The drilling rig, which you have just switched on Your Excellency, will be used to drill all the planned 31 production wells of this oil field. 20 of these wells will be used to produce oil while 11 of the wells will be used to inject water in the reservoir to help improve production,” Rubondo explained.
The brand new state of the art rig was specially designed for this field. It is the strongest that has been used in the country to date, with about 8000 horsepower and consuming about 6 mega watts of power.
Huge investment
Investment in development of the Kingfisher oilfield is expected to be over US$ 2 billion over the next 3 years until shortly after production starts and up to US$1.63billion over the remaining 20 years of the life of the oil field. #KingfisherDrillingLaunch
US$ 346 Million was invested in the Kingfisher project in 2022 bringing the total cumulative investment in the project to US$ 1.07 billion. About $580 Million is expected to be invested in KFDA in 2023.
At the current oil prices of about $87.5 per barrel, the Kingfisher project will account for about 15% of the total oil revenues to government from upstream, which is $6.9billion in total and $360million per year.
The Kingfisher oil field details
The Kingfisher oil field is about 15km long and 3km wide and is about 2km below the Lake Albert.
The oil field is expected to have a maximum production of 40,000 barrels of oil per day for five years after which, production will begin to decline.
Some of the wells that are being launched are development wells, water injection wells and production wells.
The Minister of Energy and Mineral Development, Hon. Ruth Nankabirwa has handed over the construction license for EACOP, at the Kingfisher Oil Fields, @CNOOC in Buhuka, Kyangwali, Kikuube District, and we're ready to begin the development phase of the Project. #EACOP #WeAreEACOP pic.twitter.com/wMeRLCifTr
— EACOP (@EACOP_) January 24, 2023
Eight wells are expected to be drilled before production of first oil in 2025 making the total number of wells at first oil and the rest of the wells will be drilled as production progresses.
Drilling of the wells helps acquire additional data, test the reservoirs to aid efficient and optimal production.
“This is a major milestone and an important step forward for EACOP as it signifies progress towards the commencement of our construction activities and subsequent delivery of first oil in Uganda,” said Martin Tiffen, MD EACOP Ltd.
“We are grateful to the for the expedited delivery of the license as per the commitment in the Host Government Agreement (HGA), and the continuous support for seamless implementation of EACOP activities,” said Martin Tiffen.
Excitment
The commissioning of the drilling rig for the Kingfisher Development Project(KDF) has sent excitement among sections of Ugandans. Some think oil production should begin in the coming weeks. Some have wondered why CNOOC should begin drilling when the construction of the refinery meant to refine crude oil from King Fisher and Tilenga projects has not begun.
And equally when the East African Crude Oil Pipeline meant to export crude to the international market has not taken off. Others have asked where the crude oil will go in the absence of the two commercialization projects inform of the pipeline and the refinery.
The Executive Director of the Petroleum Authority of Uganda (PAU) Rubondo explained that in order to produce the volumes that are expected from the Kingfisher and Tilenga projects, drillings of the wells for production have to be done in advance.
Those volumes require production from many wells. So you need to start drilling these wells early. So that when the day of production reaches, you begin to have production from the different wells. So according to Rubondo the drilling that has been commissioned is for the first production well that will produce oil in the Kingfisher field.
A great day it was today. HE the President launched drilling at the Kingfisher devt area. First rig for Tilenga on site, two more to come and with EACOP on course, #firstoil2025 is in sight. Add on the Refinery and our economy will be✈️🚀 @UNOC_UG @GCICUganda
— Peter Muliisa (@pmuliisa21) January 24, 2023
Chinese Ambassador to Uganda Zhang Lizhong said the investment by the CNOOC in Ugandan oil fields is the largest investment by China in Uganda. Zhang was optimistic that the investment will contribute to the well-being of Ugandans.
Chen Zhuobiao, CNOOC Uganda president, said the corporation is committed to ensuring that there is skills, knowledge and technology transfer to Ugandans. Chen said the corporation will ensure that the local people benefit from the oil by providing, among others, contracts to local companies.
He reiterated that the CNOOC will continue to adhere to high standards of environmental protection.
The Uganda People’s Defence Forces through the National Enterprise Corporation, is set to manage oil waste for the Kingfisher Oil Development area in Kikuube district.
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SOURCE: @CNOOCUgandaLtd, @GovUganda , @PAU_Uganda, Xinhua & URN
