Uganda's oil production on course

Jan 24, 2009 01:00 AM

Daudi Migereko, the Minister of Energy and Minerals, has said that the early oil production scheme is on course.
He said: "We are doing everything possible to make sure that production is achieved in good time. We shall keep updating the country on the progress we are making. Our efforts have received a boost as a result of the discovery and confirmation of the huge deposits," he explained. "Some of the issues being raised are issues we deal with in the course of our work with the oil company and they should be expected."

Migereko said there are clear institutional arrangements for dealing with issues arising from the oil deal negotiations. The minister was responding to an investigative article that Uganda's oil cash was to delay. The article revealed that Uganda's oil production would not begin this year. Industry sources attributed the delay to disagreements over oil prices, construction of the refinery and the tendering process.
But Migereko allayed the fears, saying all the issues were being addressed. Hopes for early oil production rose after Tullow Oil, a firm exploring oil and gas in the Lake Albertine Graben area, signed a memorandum of understanding with the Government to begin production by September.

The Early Production Scheme is expected to boost generation of thermal electricity and end load shedding. Early production will lower electricity tariffs. It will also enable Uganda put an end to fuel shortage. It will also save about $ 600 mm per year, which Uganda currently spends on importing petroleum.
The production scheme, which will be conducted in Kaiso-Tonya, includes production of 4,000-5,000 barrels of oil per day from Mputa oil well and a refinery, which will produce diesel and kerosene. It will also include a 50-85 MW thermal plant, a transmission line from Mputa to Fort Portal and distribution power network from Kaiso-Tonya to Hoima.

Source / New Vision
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