Uganda announces oil block licensing round, criticises EU over pipeline

PUBLISHED: Wed, 28 Sep 2022 09:06:28 GMT
Elias Biryabarema
Reuters
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Photo: via Flickr

KAMPALA, Sept 27 (Reuters) – Uganda will hold its third oil block licensing round next year, its energy minister said on Tuesday, as it seeks to develop its petroleum sector in a bid to expand its economy.

Uganda discovered crude oil reserves in the Albertine rift basin near the border with Democratic Republic of Congo in 2006 and has previously held two licensing rounds but a large portion of the basin remains unexplored.

Government geologists estimate the country’s confirmed reserves at 6.5 billion barrels of oil, of which 2.2 billion is recoverable.

“As part of the strategies to exploit the oil and gas resources in a sustainable manner the country is announcing the third licensing round in 2023,” Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu told an oil and gas conference in the capital Kampala.

In February TotalEnergies TTEF.PA and its partner China National Offshore Oil Corporation 0883.HK signed a final investment decision (FID) with Uganda and Tanzania to kick-start investments worth more than $10 billion to produce and export Uganda’s crude.

Part of that investment will involve a $3.5 billion pipeline that will help ship landlocked Uganda’s crude to the world markets via a port on Tanzania’s Indian Ocean coast.

At the same conference, Uganda’s President Yoweri Museveni criticised the European Union parliament after it passed a resolution this month urging TotalEnergies to delay development of the pipeline by a year to explore an alternative route or alternative renewable energy projects.

Museveni said the European Parliament’s move was “a wrong battleground for them. We don’t take kindly to arrogance.”

“So the plan will be implemented according to the schedule.”

“You’re lecturing me what to do in Uganda?,” he said. “Some of these people are insufferable.”

The EU resolution warns that the pipeline and associated infrastructure would displace about 100,000 people, jeopardise water resources and endanger protected marine areas in Tanzania.

Museveni had previously warned TotalEnergies, that if it heeded the EU resolution, Uganda would find another partner to develop the project.

The EU did not immediately respond to a request for comment.

TotalEnergies said in a statement the company would ensure the project achieves “sustainable development including the environment and respect for human rights.”

(Reporting by Elias Biryabarema; Writing by George Obulutsa; Editing by James Macharia Chege and David Evans)

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