Zegabi

The Ugandan government has issued a production licence to a state-owned Chinese firm, for the development of the nation’s oil reserves.

The firm, China National Offshore Oil Corporation (CNOOC), will develop Uganda’s Kingfisher oil field which was discovered seven years ago in Hoima District of Western Uganda. The field holds 635 million barrels of oil out of Uganda’s estimated 3.5 billion barrels of oil. CNOOC is expected to recover 196 million barrels in four years at an estimated cost of $2 billion and an initial production rate of 30,000 to 40,000 barrels per day.

Uganda’s State Minister for Energy, Peter Lokeris, told Journalists in Kampala that the Licence was approved on Sept 16 after an extensive review of the company’s field development plan which was submitted in November last year. The government had asked CNOOC Uganda to submit an amended and restated field development plan and a petroleum reservoir report in accordance to Uganda’s petroleum laws.

“The plan and report have been approved and the condition on the grant of this production license lifted thereby marking the entry of Uganda into the development phase of the petroleum value chain,” said Lokeris.

A conditional production license had been issued earlier to Tullow Uganda Limited – one of the major players in the country’s oil industry but Tullow farmed 66.6% of its assets in the same month.

Lokeris also said that CNOOC was required to submit to the government an environmental and social impact assessment of the different project stages including drilling, production operations and central processing facilities. Other project stages to be assessed include construction, operation and decommissioning and emergency response planning. Priority will be placed on ensuring the safety of people, preserving the environment and minimizing loss of assets.

Despite being among the world’s poorest countries, Uganda is committed to environmental protection as outlined in the National Environment Policy adopted in 1994. Weigen Jin, Vice President of CNOOC Uganda Limited promised to work with the firm’s stakeholders to ensure the oil field is developed in an environmentally friendly manner.

This licence marks the latest move by Chinese firms to secure energy resources to meet increasing domestic demand fuelled by rapid economic expansion and urbanization. China is currently one of the world’s biggest consumers of oil and the demand is expected to keep rising as the economy grows.

Several Chinese firms have made a series of investments in gas and oil resources overseas. Last year, CNOOC acquired a Canadian firm Nexen in China’s largest takeover of a foreign company.

PetroChina also bought a 49.9% stake in an Alberta-based natural gas project by Canadian firm Encana. This company also bought a stake in an Australian liquefied natural gas project that was previously owned by BHP.
The Ugandan government has issued a production licence to a state-owned Chinese firm, for the development of the nation’s oil reserves.

The firm, China National Offshore Oil Corporation (CNOOC), will develop Uganda’s Kingfisher oil field which was discovered seven years ago in Hoima District of Western Uganda. The field holds 635 million barrels of oil out of Uganda’s estimated 3.5 billion barrels of oil. CNOOC is expected to recover 196 million barrels in four years at an estimated cost of $2 billion and an initial production rate of 30,000 to 40,000 barrels per day.

Uganda’s State Minister for Energy, Peter Lokeris, told Journalists in Kampala that the Licence was approved on Sept 16 after an extensive review of the company’s field development plan which was submitted in November last year. The government had asked CNOOC Uganda to submit an amended and restated field development plan and a petroleum reservoir report in accordance to Uganda’s petroleum laws.

“The plan and report have been approved and the condition on the grant of this production license lifted thereby marking the entry of Uganda into the development phase of the petroleum value chain,” said Lokeris.

A conditional production license had been issued earlier to Tullow Uganda Limited – one of the major players in the country’s oil industry but Tullow farmed 66.6% of its assets in the same month.

Lokeris also said that CNOOC was required to submit to the government an environmental and social impact assessment of the different project stages including drilling, production operations and central processing facilities. Other project stages to be assessed include construction, operation and decommissioning and emergency response planning. Priority will be placed on ensuring the safety of people, preserving the environment and minimizing loss of assets.

Despite being among the world’s poorest countries, Uganda is committed to environmental protection as outlined in the National Environment Policy adopted in 1994. Weigen Jin, Vice President of CNOOC Uganda Limited promised to work with the firm’s stakeholders to ensure the oil field is developed in an environmentally friendly manner.

This licence marks the latest move by Chinese firms to secure energy resources to meet increasing domestic demand fuelled by rapid economic expansion and urbanization. China is currently one of the world’s biggest consumers of oil and the demand is expected to keep rising as the economy grows.

Several Chinese firms have made a series of investments in gas and oil resources overseas. Last year, CNOOC acquired a Canadian firm Nexen in China’s largest takeover of a foreign company.

PetroChina also bought a 49.9% stake in an Alberta-based natural gas project by Canadian firm Encana. This company also bought a stake in an Australian liquefied natural gas project that was previously owned by BHP.