Uganda drills 72 wells ahead of oil production

However, progress on the $4.5 billion refinery remains limited

Kampala, Uganda | JULIUS BUSINGE | Uganda’s oil sector is advancing significantly with 72 out of 457 wells drilled at the Tilenga and Kingfisher oil projects as TotalEnergies and CNOOC Uganda Limited push towards commercial production slated for 2025.

Energy and Mineral Development Minister, Ruth Nankabirwa, said during a media briefing on August 21 in Kampala, that Tilenga Project has made substantial progress, with 63 of the planned 426 wells now drilled across Nwoya and Buliisa Districts.

Meanwhile, the Kingfisher Project in Kikuube District has seen the completion of nine out of the 11 wells required for the initial phase of oil production.

The Tilenga Project, which spans both sides of the Nile, is exhibiting promising hydrocarbon indicators in its targeted reservoirs. Nankabirwa also noted that development plans for a Liquefied Petroleum Gas (LPG) facility are awaiting government approval and licensing.

She said drilling operations have concentrated on six out of the 31 well pads designated for the Tilenga project, which will accommodate 426 producer and injector wells. The well pads—Jobi-Rii 05 & 04, Ngiri 03 & 01, and Gunya 01 & 04—are being actively developed, with all three drilling rigs operational. As of August 16, 2024, seven well pads are over 85% complete and ready for rig installation, Nankabirwa confirmed.

The Tilenga Industrial Area, set to host the Central Processing Facility (CPF), Drilling Support Base, and Construction Camp, is nearly complete at 99.7%. The area has been handed over to the Drilling and Wells Contractors and the Engineering, Procurement, Supply, Construction, and Commissioning (EPSCC) contractor.

The CPF construction is progressing with main pipe racks and foundation bases, achieving an overall completion rate of 47.8%. Meanwhile, the 4,000-person Construction Camp is assembling accommodation units, currently housing about 2,500, with additional recreational facilities under development.

Land acquisition for the Tilenga project has been largely successful, with 99.7% of project-affected persons (PAPs) compensated and in-kind compensation (land for land) completed for 21 out of 33 PAPs, representing 63%.

Kingfisher project

The Kingfisher Project in Kikuube District, operated by CNOOC Uganda Limited, is also advancing. This project includes a Central Processing Facility (CPF) with a capacity of 40,000 barrels per day and plans to drill 31 wells across four well pads.

Since beginning production well drilling in January 2023, nine of the eleven wells required for First Oil have been completed. Construction of well pad sites and infield roads is 92% complete, and approximately 1,020 acres of land have been acquired.

Both Tilenga and Kingfisher projects are implementing livelihood restoration programs, including transitional and psychosocial support, agricultural improvements, reproductive health services, and vocational training.

To meet its 2025 commercial production target, Uganda must complete two critical infrastructure projects: the refinery and the East African Crude Oil Pipeline (EACOP). However, progress has been impeded by financial constraints.

Regarding the $5 billion EACOP project, Nankabirwa reported significant advancements since the issuance of a construction license in 2023, which allowed civil works to commence at the Main Camps and Pipe Yards (MCPYs) in Hoima and Sembabule districts.

Engineering, Procurement, Construction Management, and Commissioning (EPCMC) activities are ongoing in London and Dar es Salaam, with Worley and subcontractors ICS Engineering and Norplan reporting an overall EPCMC progress of 39.2%, with detailed engineering at 89.1%, surpassing the planned 88.3%. The construction of the thermal insulation plant in Nzega District, Tabora region in Tanzania, was completed and commissioned in March 2024, with seven batches of line pipe, totaling 500 kilometers, delivered to Tanzania, five of which reached the Thermal Insulation System plant.

In contrast, progress on the $4.5 billion refinery remains limited. Nankabirwa indicated that negotiations for key commercial agreements, including the Implementation, Crude Oil Supply, and Shareholders Agreements with Alpha MBM Investments LLC, commenced in January 2024 and are ongoing.