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Following the announcement of the Final Investment Decision (FID) in 2022, Uganda’s oil flagship projects, including the crude oil pipeline, the Kingfisher and Tilenga, Uganda has recorded at least $7b (about shillings 26.3 trillion) in investment. Within just two years, the sector has moved from clearance of project ground to real construction. Martin Kitubi reports on the achievements of Uganda’s oil and gas sector in the year, as well as what lies ahead.

As part of the sector achievements, works for the construction of the East African Crude Oil Pipeline (EACOP) have already commenced in both Uganda and Tanzania.

In Uganda, the early civil works for the support camp for the ground zero construction area at Kabalega Industrial Park in Hoima district started in October and the main contractor pitched camp on the site last month.

In addition, it will host about five Main Camp and Pipe Yards (MCPY), works have either been completed or ongoing at some.

When we visited the sites, the water supply activities were ongoing at all Ugandan sites of MCPY2, MCPY3 and MCPY4 and at Pump Station 2.

The schedule indicates that there will be a Main Camp and Pipe Yard area in the districts of Hoima, Kakumiro, Mubende, two in Sembabule, and one in Kyotera.

It is estimated that each of these camping areas will host at least 300 skilled experts, who will build kilometres of pipeline length.

According to the schedule of works, these camps are expected to be concluded before the end of the calendar year.

Ahmed Arafatalifranji, the EACOP Construction Manager at Main Camp and Pump Station One in Hoima, explained that the different camps will enable the contractor to complete the crude oil pipeline in 2025, the target period for the first oil.

Works in Tanzania

Tanzania, which will host the longest part of the EACOP, has seen more work ongoing than in Uganda under the crude oil pipeline project.

At the Tanga terminal and jetty, accommodation camps for the workers had been completed as of November 2023.

In addition, civil works and tank foundations, as well as a jetty pile test, commenced in October 2023 in Tanzania.

Works at the MCPY 6, 8, 9,10,11 and 15 had been completed as of November and similar works were ongoing at MCPY 5 in Nyanza.

In Tanzania, the construction of the thermal insulation coating plant is almost complete. As of November 2023, the main building structure was completed.

At the site, the EACOP teams and its contractors had started equipment installation including the overhead crane.

In addition, civil works for the diesel and N-Pentane bases were ongoing and accommodation camps construction had started.

The plant will be used to coat pipes before they are welded and later buried in the ground when construction commences.

According to the plan, the first pipes, which will come from China, are expected to be at the site before the end of the year, ahead of the actual construction.

According to officials, the official construction of the pipeline is expected to commence in January 2024.

EACOP Compensation

According to the November data from the EACOP Company, 13,564 people will be affected by the crude oil pipeline. Of these, 3,660 are in Uganda whereas 9,904 others are in Tanzania.

According to the data, at least 94% of project-affected persons (PAPs) in Uganda and 98% in Tanzania, have signed compensation agreements. This implies that they agreed to the valuation of their property.

In addition, the data indicate that at least 90% of PAPs in Uganda have been fully compensated and 99% in Tanzania.

The EACOP data indicated that a total of 203 households in Uganda and 344 others will be affected by the project. Of these, 117 in Uganda and 339 will get replacement houses.

As of November, all the 177 replacement houses in Uganda had been handed over to the PAPs.

Fred Baraza, the community relations co-ordinator, who co-ordinates land acquisition and compensation in the EACOP host districts, said those yet to sign compensation agreements, have internal challenges.

“Majority of them lack letters of administration, especially for estates. Some do not have national identification cards, which are needed during compensation and identifying the right PAPs,” he said.

Baraza added: “However, those who signed compensation agreements, but have yet to receive, are in the process of opening up bank accounts. As soon as that is concluded, they will undergo financial literacy classes on how to utilise the funds received. Thereafter, these funds will be sent to their accounts.”

As part of the best practices, he said, the EACOP and government require that couples open up joinz bank accounts.

Status at Kingfisher, Tilenga

Tilenga and Kingfisher oil development works are ahead of the EACOP because the two projects will feed crude oil into both the EACOP and the planned oil refinery.

When our reporter visited both the Kingfisher and Tilenga areas in Kikuube and Bulisa districts, respectively, the works were steady fast.

The Permanent Secretary ministry of finance, Ramadhan Ggoobi (right) with other officials visiting one of the oil well pads at Kingfisher project managed by CNOOC. (New Vision/File)

At both sites, the oil drilling rigs had been installed and spudding was launched. Spudding is the process of starting to drill an oil well to prepare for extraction.

According to the plan, the Kingfisher oil project will operate one oil rig to develop 31 oil wells, which will be drilled on four well pads.

On the other hand, the Tilenga project will use three oil rigs to develop 400 wells, which will be drilled on 31 well pads.

Construction of the Kingfisher and Tilenga Industrial Areas, which will host the Central Processing Facilities (CPF), is ongoing.

When we visited the sites last month, stringing and welding of the Kingfisher feeder pipeline, which will take crude oil to the export hub in Buseruka in Hoima, was ongoing.

Under the Kingfisher, the stringing of the feeder pipeline had reached the export hub with sections waiting to be welded and buried under the ground.

Under the Tilenga project, a pipeline connecting the oil fields in the Murchison Falls National Park had already been buried underground.

Restoration of part of the area had already started.

New oil belts

As part of the plans to obtain more crude oil for Uganda’s facilities, the energy ministry has commenced a search for more oil resources in six new sub-regions.

According to the plan, which Saturday Vision has seen, the Government seeks to undertake initial oil and gas studies in the 13 districts that make up the Lake Kyoga basin.

The districts to be covered include two in Buganda: Kayunga and Nakasongola, as well as Kiryandongo in Bunyoro.

In the eastern region, the oil and gas studies will be conducted in Buyende, Kamuli and Kaliro in the Busoga region, Pallisa in Bukedi as well as Soroti, Serere and Kaberamaido in Teso region.

In the northern region, the plan indicates that the ministry will conduct studies in the districts of Amolatar, Apac, Kole and Dokolo, all in the Lango region.

According to the schedule of works seen by Saturday Vision, the works, which were approved by Cabinet recently, will cover ground gravity magnetic and geological surface mapping.

As part of the initial studies, the schedule indicates that the ministry will establish base stations in selected districts of the Kyoga basin districts.

However, these will be stationed in safe places free from vandalism. The base stations will facilitate the co-ordination and tracing of positions during the collection of data.

According to the schedule, the work will commence this month.

Frank Mugisha, the assistant commissioner in charge of petroleum exploration, development and production at the energy ministry, confirmed that they are set to conduct studies.

According to Mugisha, opening up the Kyoga basin is part of the efforts to ensure a consistent supply of crude oil for the flagship oil projects under development.

“As the government, we are also trying to open basins for new explorations. The production licences the Government has issued so far, have a duration of about 25 years. Meaning we need more resources,” he said.

Adding that,” With current discoveries, production will reach a peak after one year of production and a maximum of not more than five years. Meaning in the sixth year, the production will start going down and that time, it is important that we find more resources to prolong the plateau.”

Mugisha said the country has a desire to achieve economic viability of the infrastructure such as the crude oil pipeline and the refinery, under construction.

“With respect to this, the ministry is opening basins including Kyoga Basin, Moroto-Kadam Basin and Hoima Basin. However, works at the Hoima Basin will come much later after we have concluded both Moroto-Kadam and Kyoga basins,” he said.

There are 12 districts that make up the Moroto-Kadam basin, including Amudat, Napak, Moroto, Nabilatuk and Nakapiripiriti in Karamoja region, as well as Katakwi, Kumi and Bukedea in Teso.

It also covers districts such as Bulambuli in Bugisu region, Kween, Kapchorwa and Bukwo in Sebei.

The promising Moroto-Kadam basin

While sharing the progress under the Moroto-Kadam Basin studies, Mugisha told the congregation that they had encountered hydrocarbons, a sign that there could be oil.

“We have so far covered about 86% of the Moroto-Kadam Basin and the data we have collected so far gives hope,” he said.

After years of intense investigations, the energy ministry in 2021, revealed that they had discovered key indicators which show that there could be more oil resources in Karamoja.

Preliminary findings from geological, geophysical and geochemical studies in the Moroto-Kadam Basin, established that there are sandstone and claystone in the districts of Amudat, Nabilatuk and Nakapiripiriti. A claystone is lithified and non-fissile mudrock, with 50% clay.

On the other hand, sandstone is a sedimentary rock composed of sand-size grains of mineral, rock, or organic material.

It also contains a cementing material that binds the sand grains together and may contain a matrix of silt- or clay-size particles that occupy the spaces between the sand grains.

Much of the petroleum reserves in the world are found in ancient sandstones which have porosity and permeability. In 2019, the ministry said they had discovered oil seeps at Moyok, Kween district.

Oil seeps are natural hydrocarbon stocks characterised by natural low rate escape of liquid or gaseous crude oil and tar, also known as oil seepages, to the earth’s atmosphere and surface.

Geological studies in the 1990s showed that the Albertine Graben and Moroto-Kadam sedimentary basins could be having oil deposits, according to the energy ministry.

The ministry embarked on the exercise in 2019.

What we have so far

In 2006, Uganda confirmed commercial petroleum resources in the Albertine region.

According to the Petroleum Authority of Uganda (PAU), Uganda has an estimated SIX billion barrels of commercially viable oil, with about 1.4 billion barrels of these resources, recoverable.

It is estimated that what the country has will be consumed within 25 years. However, if the other studies deliver more economically viable resources, the period will be extended.

This too will increase the sustainability of the oil refinery.

According to the ministry, only 40% of the Albertine Graben has been explored, out of which only 15% has been licensed.

How is oil formed?

It takes millions of years for oil to be formed.

The EnergyEducation.ca, an online portal on energy, also confirms that the beginning of crude oil formation happened millions of years ago.

The online portal describes oil as a fossil fuel that has been formed from a large number of tiny plants and animals such as algae and zooplankton.

These organisms, it says, fall to the bottom of the sea once they die and over time, get trapped under multiple layers of sand and mud. The tiny organisms are composed of carbon and hydrogen and thus form the hydrocarbon.

In addition, the portal says, that about 70% of oil deposits existing today were formed in the Mesozoic age (252 to 66 million years ago), whereas 20% were formed in the Cenozoic age (65 million years ago).

The remaining 10% were formed in the Paleozoic age (541 to 252 million years ago).

This is likely because the Mesozoic age was marked by a tropical climate, with large amounts of plankton in the ocean.

“The formation of oil begins in warm, shallow oceans that were present on the Earth millions of years ago,” a section on the formation reads.

This article first appeared in Saturday Vision edition of December 23, 2023.