Page 6 - DMEA Week 45 2021

DMEA COMMENTARY DMEA

Ugandan oil industry

making some progress

CNOOC’s FID on the Kingfisher project may have a greater positive

impact than civil society groups’ objections to draft EACOP legislation.

AFRICA UGANDA’S nascent oil industry has heard a yesterday in a meeting,” she said, according to a
mix of good and not-so-good news over the last report from the Ugandan daily Business Focus.
week. “They have delivered a letter in writing, [and] the
WHAT: On the positive side, China National Offshore problem has been sorted out. They have signed
While CNOOC has pledged Oil Corp. (CNOOC) has reportedly taken a final the agreement.”
to move forward with investment decision (FID) on proceeding with Nankabirwa was referring to previous reports
development, NGOs are upstream development work at the Kingfisher in which Ugandan government officials were
raising questions about oilfield in the western part of the country. This is quoted as saying that they were still waiting
a draft bill that aims good news, as it signals that Uganda is one step for an FID on Kingfisher, which will be one of
to support the EACOP closer to developing the hydrocarbon reserves the two primary sources of throughput for the
project. discovered in 2006. 216,000 barrel per day (bpd) EACOP. TotalEn-
But on the not-so-positive side, non-gov- ergies (France) has already taken this step for
WHY: ernmental organisations (NGOs) are urging Tilenga, the other field that will use the pipeline
EACOP will play a crucial Ugandan lawmakers to take another look at the to send its production to market, but CNOOC
role in the Ugandan oil proposed conditions for the construction of the has been slower to do so.
sector, as it will connect East Africa Crude Oil Pipeline (EACOP). This The energy minister was speaking just a few
upstream assets to world is not good news, as it has the potential to slow days after representatives of Uganda National
markets. the pace of work on the pipeline project, which Oil Co. (UNOC) reported that the Chinese firm
is crucial for the development of the Kingfisher had made another move that is likely to support
WHAT NEXT: and Tilenga oilfields. upstream development. According to UNOC,
Calls for revising the This essay will seek to assess the impact of as of late last week, CNOOC had met all of the
draft EACOP bill have these two developments. requirements governing its participation in the
the potential to slow EACOP project.
development. CNOOC’s FID Both of these news items are good signs for
CNOOC’s FID came to light on November 4, Uganda’s oil industry. They signal that the Chi-
when Ugandan Energy Minister Ruth Nanka- nese company is ready to commit to the King-
birwa revealed that the state-owned Chinese fisher project – and also ready to help build the
company had informed Kampala of its decision pipeline that will give the Kingfisher and Tilenga
to move forward with the Kingfisher project. fields access to world markets, which they need
“I was with the chairman of CNOOC to be developed economically.

P6 www. NEWSBASE .com Week 45 11•November•2021