Oil & Gas

05 Nov 2021

CNOOC Gives Green Light to Uganda Crude Project

05 Nov 2021  by   
China's state-controlled CNOOC has taken a final investment decision (FID) on the Kingfisher crude project in Uganda.

The firm's local president Chen Zhuobiao said the firm is ready to offer $460mn in contracts to Ugandan companies in the coming months as work gets under way at the long-delayed project in the Lake Albert basin near Uganda's border with Democratic Republic of Congo.

CNOOC will proceed with development of a central processing facility, the Petroleum Authority of Uganda's executive director Ernest Rubondo said. This will be capable of processing the 40,000 b/d to come from Kingfisher at capacity. The government said it has completed construction of a power line to facilitate development.

First oil is scheduled for the first half of 2025, from Kingfisher and the adjacent 190,000 b/d Tilenga discovery being developed by TotalEnergies. China's Sinopec International Petroleum Service and US-based McDermott International signed conditional development contracts in June.

The project has been mired in bureaucracy for several years following protracted negotiations over upstream contract terms, tax disputes, disagreements over the pipeline route and uncertainty over the economics of the proposed refinery. More recently, the pipeline has attracted strong opposition from environmental campaigners.

The bulk of production will be exported to Tanga on Tanzania's coast via the heated East Africa Crude Oil Pipeline (EACOP), with the remainder feeding a refinery to be built in Uganda. TotalEnergies, the lead operator of the project is awaiting an enabling law being enacted by the Ugandan government to kick start the pipeline construction process. Uganda's energy minister Ruth Nankabirwa said the bill is being debated in parliament and will be passed before the end of the year.

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