Uganda develops its Oil Sector

Uganda is preparing to launch its 3rd round of oil block licensing in 2023. The country intends to develop its economy thanks to its oil.

Uganda is seeking to develop its economy. Thus, the country relies on its oil sector. Next year, it will organize its 3rd round of licensing for oil blocks.

Uganda wants to exploit its oil

Uganda discovered crude oil reserves in the Albertine Rift Basin in 2006. It is located near the border with the DRC. The basin has already undergone 2 licensing rounds.

However, a very large part of the basin is unexplored. According to government geologists, the country’s confirmed reserves reach 6.5 billion barrels of oil. 2.2 billion barrels are recoverable.

Ruth Nankabirwa Ssentamu, Minister of Energy and Mineral Development, says:

“As part of strategies to develop oil and gas resources in a sustainable manner, the country is announcing the third licensing round in 2023.”

Tensions with the EU

In February, TotalEnergies and CNOOC signed an IDF with Uganda and Tanzania. Together, they were to launch investments in excess of $10 billion to produce and export crude from Uganda.

Of this amount, $3.5 billion will be allocated to the construction of an oil pipeline. It will bring crude oil from Uganda to a port in Tanzania. Remember that Uganda is a landlocked country. Thus, in order to export its oil, the country must transport its oil to a port in a neighboring country.

However, earlier this month, the European Parliament passed a resolution urging TotalEnergies to delay the development of the pipeline by one year. Yoweri Museveni, President of Uganda, strongly criticized the resolution.

He states:

“[La décision du Parlement européen est] a bad battlefield for them. We don’t stand for arrogance. The plan will therefore be implemented according to schedule. Are you lecturing me on what to do in Uganda? Some of these people are insufferable.”

According to the EU, the construction of this pipeline would have many negative impacts. It would result in the displacement of 100,000 people. In addition, this route would compromise water resources while endangering some of Tanzania’s marine protected areas.

For its part, TotalEnergies is under pressure from the Ugandan president. He said he was ready to find another partner if the French company complied with the EU resolution.

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