The government has been banking on the Joint Venture Partners, Tullow, China National Offshore Oil Corporation-CNOOC and Total to make a Final Investment Decision with regard to the project, to unlock value in the countrys oil and gas sector.
When Uganda confirmed existence of commercially viable petroleum reserves in the Albertine Graben in 2006, the biggest question whether oil reserves would become a blessing or a curse to the country. Hoima, once a sleepy town and district has since the discovery of oil and gas been bustling with activity. The momentum has been higher this year with plans to construct an oil refinery and an international airport ahead of first oil by 2020.
Several inward investors providing services to oil and gas sector are concerned about national participation and local content regulations being introduced by a private members bill soon to be tabled in Parliament.
Tullow Oil, in January this year, agreed to transfer 21.57 percent of its 33.33 percent interests in Lake Albert Development Project covering exploration areas 1, 1A, 2 and 3A to Total for a total consideration of USD 900 million 3.27 trillion Shillings.
The signing of the Production Sharing Agreement and grant of Petroleum Exploration License will have Armour Energy Limited as a newcomer in Ugandas oils oil and gas sector. It is one of the three companies that made it to the last round of the first competitive licensing process which opened in February 2015.
The first round of negotiations between the Uganda government and the Consortium selected to construct the oil refinery commence this week in Kampala. Sources at the Ministry of Energy reveal that negotiations are scheduled to take place from from 21 to 25 August.
A number of activists under the Water Governance Institute are expressing fear that communities living in Oil production areas may face water shortages when oil production commences. The activists say water may prove more of a hindrance during the oil production and development phase because of the large quantities required during the process.
A statement from Tullow headquarters confirmed that CNOOC has notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and Cnooc to acquire half of the interests being transferred to Total in Uganda.
Uganda Radio Network has learnt that ten engineering firms submitted bids for the Kingfisher Front-End Engineering Design FEED. The selection of the winning bidders was reportedly handled by Ugandas parent company China National Offshore Oil Corporation CNOOC.
The appeal comes barely two months after oil exploration giants Total, CNOOC and Tullow developed Ugandas Albertine Graben land acquisition and resettlement framework bringing the country another step closer to exploiting its vast oil reserves.
The amount of oil Uganda can recover has grown marginally in 2014, according to Ernest Rubondo, the Commissioner, Petroleum Exploration and Production Department (PEPD). Uganda now boasts of 1.4 billion barrels of oil that is recoverable, up from 1.2 billion barrels. This, even after the available oil in the ground grew by 85 percent to 6.5 billion barrels. The amount recoverable means the oil Uganda can sell commercially and extract from the ground.
The two entities â€˜Tullow and Heritage Oilâ€™ have been engaged in legal battles arising from a deal that was struck in 2010 which saw Tullow agree to pay Â£1.45billion to buy Heritage\'s assets at the Lake Albert basin. The basin is estimated to hold about one billion barrels of oil.