Increased sanctioning activity in African energy has resulted in growth in cumulative expenditure of $23 billion by 2025, according to the African Energy Chamber’s (AEC) 2022 first quarter outlook.
It is estimated that Uganda has 6.5 million barrels of oil reserves, however only 1.4 billion barrels are economically recoverable. Greenfield investments in Uganda significantly contribute to the country’s oil and gas exploration for transformation and sustainable energy supply locally Uganda currently has the capacity to produce 230 000 barrels per day (bpd) over 15 years, with the potential to maintain east Africa’s supply of oil. Through recent developments and policies, Uganda has attracted several investments, which has placed the east African country with the likes of Africa’s top oil producing countries such as Nigeria and Angola.
Currently 66% of Uganda’s population lacks adequate energy supply. Recent oil and gas exploration in Uganda could alleviate the country’s energy supply and establish itself among Africa’s top oil and gas producers. Executive Chairman of the AEC NJ Ayuk noted that, “The timing for Uganda to optimize investment and exploration and to kickstart its production engines is now. Price uncertainty across the globe and energy poverty in Africa provide a perfect storm for Uganda to enhance its oil and gas market and to emerge as both a regional and global energy supplier.”
Two ongoing prominent Uganda projects include the Lake Albert Development Project comprised of Tilenga and King Fischer projects headed by Total Energies and the China National Offshore Oil Corporation (CNOOC), which are aimed to produce 230 000 bpd by 2025. The second project includes the 1 410km East African Crude Oil Pipeline project to transport 261 000 bpd, also led by TotalEnergies and CNOOC in conjunction with the government of Tanzania and the Uganda National Oil Company.
Ayuk mentioned the impact of the FID in Uganda’s energy development sector during the announcement in February 2022. He noted that now is the ideal time for Uganda to capitalize on expanding oil and gas exploration because the market is currently viable. Uganda sustains its economy mostly from its petroleum imports. Efforts to explore oil and gas will boost not only Uganda’s oil markets but would develop infrastructure and economic development.
Recent developments in the Ugandan energy sector will be integral in advancing the east African nation’s oil and gas exploration.