Industry Trend Analysis - Pipeline Project Constrains Upstream Developments - MAR 2018

BMI View: The development of the Ugandan upstream sector remains contingent on the successful completion of the Hoima-Tanga pipeline. We note downside risks to the timely and cost-effective completion of the pipeline are high, with technical, environmental and operational constraints adding to potential project cost.

Uganda's nascent energy sector is expected to enjoy substantial growth through the 2020's with further upside from the promising potential of oil and gas exploration. Nigeria's Oranto Petroleum has been awarded two production sharing agreements for exploration of the Ngassa block located in oil rich Albertine region. The field's former operator, Tullow, confirmed the presence of both a shallow gas play and a deeper oil play which may yield in place oil volumes of 311mmbls. In addition, an Australian independent, Armour Energy, has signed a production sharing contract covering the Kanywataba block in the Albertine rift basin. The block was previously licensed to Total, CNC and Tullow who abandoned the field in 2012 after explorations failed to discover substantial oil reserves.

Although Uganda does not produce oil at present, continued upstream interests supported by ongoing exploration, highlight the country's hydrocarbon potential. With CNC's Kingfisher project and Total and Tullow's production from the Albertine rift, the country is set to become an oil exporter in 2022 ( see: ' Oil Ambitions Progressing', 16 June 2017).

Oil Output Growth Expected In The Early 2020's
Uganda: Crude Oil Production, 000b/d
f = BMI forecast. Source: BMI/EIA

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