Page 15 - DMEA Week 32

DMEA REFINING DMEA

Further delays likely at Ugandan

refining project

UGANDA UGANDA’S plan for building a refinery to pro- that the project might reach the FID stage
cess crude oil from fields near Lake Albert is before the end of this year. Doing so would
The project will hinge likely to face further delays. allow the fields to reach first oil in 2024,
on progress at oilfield The East African country has said it wants with construction work on the refinery com-
developments. to construct a plant capable of handling 60,000 mencing in the same year.
barrels per day (bpd) of domestically produced But as Africa Oil + Gas Report noted last
crude. Since it is not yet a commercial producer week, the French company is not now expected
of oil, though, this project will hinge on the suc- to take the FID until 2021 at the earliest. If so, the
cessful start of upstream development work at target date for first oil will have to be pushed back
oilfields originally assigned to Tullow Oil (UK/ until at least 2025, and work on the refinery will
Ireland). And that project has fallen far behind have to be postponed as well.
schedule. Under its agreement with Tullow, Total has
Tullow failed to make much progress in increased its stake in Blocks 1, 1A, 2 and 3A from
Uganda last year, largely owing to tax disputes 33.33% to 66.67%. Tullow had been serving as
with the government that derailed its farm- operator of Block 2, while Total was already
out agreement with Total (France) and China operating Blocks 1 and 1A, and CNOOC was
National Offshore Oil Corp. (CNOOC). As a operating Block 3A. Development of these four
result, it missed the deadline for making a final blocks, which contain the Kingfisher and Tilenga
investment decision (FID) on its upstream pro- oilfields, is likely to require about $6.7bn worth
ject, which will eventually yield 230,000 bpd. of investments.
This, in turn, pushed back the target date for Total has also acquired Tullow’s 33.3% stake
starting work on the refinery. in the East Africa Crude Oil Pipeline (EACOP)
Since then, the parties have removed project, which will be used to export most of the
some of the obstacles in their path. Tullow crude extracted from the Ugandan fields. The
and Total unveiled a new deal in April, and French company will work with Uganda and
CNOOC has decided not to block the latter Tanzania to build the $3.55bn pipeline along a
company from acquiring 100% of the for- 1,445-km route from Hoima, a city near Lake
mer’s Ugandan assets. Ugandan authorities Albert, to Tanga, a port on the shore of the
have signalled their approval of the $575mn Indian Ocean. When finished, the link will be
agreement and have also expressed the hope able to handle 216,000 bpd. ™

Week 32 13•August•2020 www. NEWSBASE .com P15