Uganda will be Africa’s next oil

Uganda is to become Africa’s next oil-producing country. Despite the low oil prices, the country is pushing forward to become a producer – it closed applications for the country’s first round of competitive licensing for the oil production, which is set to start in 2018.

Production licenses that were on offer prompted seventeen applications from companies including Tullow Oil, Sasol, and PTT. The offers were made despite moves by major energy companies to cut more than $100bn in spending on new projects, as a result of oil prices dropping worldwide.

In a report by ThisIsAfrica, Uganda’s energy minister Irene Muloni states that the country wants to take advantage of the decline in the oil price, and therefore the decline in the operations and maintenance price. “We can use [this time] for preparation, so by the time the oil price is up we are ready for production,” she elaborated.

Uganda is believed to have an estimated 6.5bn barrels of oil and 500bn cubic feet of natural gas. According to the IMF, the country has sub-Saharan Africa’s largest reserves after Nigeria, Angola and South Sudan. Uganda wants to handle its crude in three ways: crude to power in the short term, crude to a refinery and crude to the world market, through an export pipeline whose route is still under negotiation with coastal partner Kenya.

Uganda is negotiating a deal for construction of its own refinery with a consortium led by RT Global Resources, a division of Russian state-owned company Rostec. It will be able to refine 60,000 barrels a day by 2020.

Further reading on thisisafricaonline.com

Image by Wikipedia

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