Business Feature By Leo Odera Omolo In Kisumu City.
UGANDA will start producing crude oil this year. The announcement was made by the Tullow Oil Chief Operations Officer Mr. Paul McDade at a press conference held in the Uganda capital, Kampala on Tuesday.
Tullow, the Irish oil firm exploring oil and gas in Western Uganda made this disclosure after having held a series with President Yoweri Museveni at the weekend and on Monday this week.
McDade further disclosed that the initial oil production will be 500 – 1000 barrels per day, which will progressively rise to 10,000 barrels per day next year and 150,000 barrels per day in 2015.
“We will start producing about 500 to 1000 barrels a day in the middle of this year,” The Tullow CEO told newsmen.
He went on, “This is not economically significant, but it is a great step forward for Ugandans to know that their oil is being used in industrial use,”
McDade said the first bulk of oil will produced from the Kasamene field in Bulisa district in Western Uganda and will be used for the local industry and power generation
Kasamene is located in bloc 2 which is fully owned by Tullow Oil . The other two oil fields in block 1 and 3A, are jointly owned with Heritage, which is in the process of selling off its 50 per cent stake.
“We would like to produce on tests basis to see how the oil will behave and how the crude can be transported by truck since it is waxy. We will have to heat the oil to keep it flowing,” McDade explained.
Tullow plans to invest between USD 300 million and USD 400 million in this initial phase and later raise the amount to USD 5billion to produce 150,00i0 per day.
Dade disclosed that that the two companies which Tullow preferred to work with are Chinese state owned CNOOC and French Total.
“The Chinese best in building refineries and they move fast. CNOOC has just built a big refinery in China which can refine the same quality of oil in Uganda. They built it in within a period of two years
He added by saying that they are looking forward to work with the Ugandan National oil Company that is currently in the process of being formed.
Reacting to criticism that they have not delivered on the early production scheme, the Tullow CEO said they preferred drilling more wells to access the total oil reserves rather than spending on their money on one small oil field.
“A refinery is a very expensive project for both the private and public sector. You cannot put it in place unless you are sure that you have enough oil supply for 20 more years.”
McDade said Tullow together with its partner Heritage has invested so far about USD 700 million in Uganda.
The London listed company yesterday also announced that they placed 80 million share on the London stock exchange to fundraise for its operations in Uganda and Ghana.
Ends
leooderaomolo@yahoo.com
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from Leo Odera Omolo
date Thu, Jan 28, 2010 at 12:59 PM
OIL AND GAS PRODUCTIONS TO START IN UGANDA IN THE MIDDLE OF THIS YEAR AS TULLOW OILTAKES ON BOARD THE STATE OWNED CHINESE OIL GIANT AS ITS PARTNER.