The scale of the Uganda’s infrastructure projects required to transport the fuel out of the country may delay the planned early exports of output from Ugandan crude deposits being developed by companies including Tullow Oil Plc and Total SA, Bloomberg reported. The challenges include lack of pipeline, refinery and export facilities.
The Ugandan government had said that it expected to start shipping crude by 2021, but in order for that to happen, it must succeed in dealing with regional challenges faced by other countries such as Mozambique and Tanzania, where inadequate finance and technical capacity was hindering the commencement of natural gas production, informed Ecofin Agency.
Landlocked Uganda has an estimated 1.7b barrels of recoverable oil at fields in the Lake Albert basin that the government expects Tullow, Total and China’s Cnooc Ltd. to start pumping by 2021. The government has estimated it will receive $43b in revenue from the resource over 25 years.
A spokesperson for Tullow, George Cazenove, said that developing the fields to commercial production requires about $8b. He added that For production to begin in 2021, Tullow would have to make a final investment decision on the project by 2018. The crude would then need to be ferried along a yet-to-be constructed 1,400km pipeline to the Indian Ocean port of Tanga in neighboring Tanzania. State-run Petroleum Directorate’s Head, Robert Kasande, said that Uganda expects the pipeline, which is backed by Total, to be completed by 2019.