Between Drilling and Production, Another Two Year’s-Wait for First Oil Drop

The commencement of oil drilling in Uganda’s Albertine Graben on Tuesday was a major step towards the country’s oil production stage. For ordinary Ugandans, drilling could have been mistaken for ‘getting oil out of the ground’ especially as one vernacular uses the phrase ‘okusima amafuta’ which literary translates as ‘excavating oil’ but can also mean getting oil out of the ground.   

Yet, the governments of Uganda and Tanzania agreed with the oil and gas companies that the oil would be out of the ground by 2025, though others think it could be a few months later. This would happen when the necessary infrastructure required to complete the market chain for the commodity is completed.

So, drilling for oil is actually creating a hole through the earth up to where the resource is, and creating a way through which the crude would be transported to the surface. After drilling, the oil itself will remain in the ground until the necessary transportation and processing facilities, like storage, pipelines, and refinery are in place. 

After sinking the pipes into the ground the well’s opening is sealed with a wellhead, usually dubbed ‘Christmas tree’ in reference to the many valves and other parts that characterize it, usually in bright colors like red and yellow.  The wells are distantly spaced and a long distance from where the two Central Processing Facilities in Kingfisher and Tilenga areas are being constructed. 

For example, the network of flow lines for Tilenga will cover 160 kilometers to the CPS, while the pipeline from the CPF to the refinery and EACOP at Kabaale will be 94 kilometers long.  So, after the CPFs are completed and connected to the wells by field pipes, they will be ready to receive crude from the various wells. 

Here, the crude is processed to remove any unwanted substances like water, sand, and other impurities, before it is ready for transportation by main pipelines from the Kingfisher and Tilenga areas to the Kabaale Industrial Park in Hoima. At the industrial park, the crude will be fed into the planned refinery for processing into final products like petrol, diesel, and kerosene, or other petrochemical products like plastics. 

The planned refinery will consume up to 60 barrels a day, while the rest (about 170,000 barrels) will be fed into the export pipeline due to be built from the park to Tanzania’s Tanga port for the international market. 

Tullow and Heritage Oil rigs

The Kingfisher rig and its accessories were transported from Mombasa over two weeks, and according to the Ministry of Energy and Mineral Development. The delivery took 280 trucks to accomplish, and a few weeks to assemble before being commissioned by the minister and drilling commissioned by president Yoweri Museveni. 

However, these are not the first rigs in the country, nor is the drilling. Tullow Oil and Heritage Oil, in the early 2010s, drilled several wells in Buliisa during the exploration activities, and actually got oil from the ground. Ten years later, about 45,000 barrels got from test wells remain in huge containers in Buliisa. 

“The rigs used in exploration are small and are meant to extract small volumes of crude for testing purposes, they can easily be dismantled and moved from well to well,” says Gloria Sebikari, Manager of Corporate Affairs at the Petroleum Authority of Uganda. 

The CNOOC rig launched in Kikuube on Tuesday is for a much more intensive program, which will involve getting all the crude from a well, or wells under a well pad before it is moved. “It will get crude from as deep as seven kilometers, but will also drill water wells which water will be pumped down the oil wells to push up the crude. So this is more heavy-duty and meant for a more intensive activity,” adds Sebikari.  

Delivery of crude

The crude will be delivered at the industrial park for processing or export, meaning that before production at Kingfisher and Tilenga, either the crude export pipeline or the refinery or both, must be ready. 

The East African Crude Oil Pipeline (EACOP) Ltd is sure that by then, the pipeline will be ready. Minister Ruth Nankabirwa has handed over the construction license for the pipeline to give way for the works to commence.    

While handing over the certificate at Buhuka, Kyangwali in Kikuube District, Minister Nankabirwa stressed the need to do the work expeditiously, saying there were no more excuses as most of the requirements, including compensation of affected persons, are getting completed.   

Martin Tiffen, EACOP Ltd Managing Director, said, “This marks another step forward for EACOP as it allows the commencement of our construction activities in Uganda upon completion of the ongoing land access process.”   

Tiffen says more than three-quarters of the people in Uganda have either been compensated or have signed agreements. Construction is expected to start from the Tanzanian side according to the plan. The four billion Shillings (about 13 trillion Shillings) pipeline will traverse 171 villages in 10 districts over 1443 kilometers. 

“We are grateful to the government of Uganda for the expedited delivery of the application as per the commitment in the Host Government Agreement (HGA) and the continuous support for the implementation of the EACOP project,” said Tiffen. 

On the refinery, the procurement of the contractor was completed and the Albertine Graben Refinery consortium comprised of several international companies is tasked to complete the construction by 2025, though experts think the realistic date should be 2026/2027. “To be clear, the Final Investment Decision for the refinery should be done by the end of June this year,” said minister Nankabirwa.

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