May 3, 2013

Uganda To Import Crude Oil For Its Planned Refinery

Government plans to import crude oil for its planned refinery once the country’s deposits have been exhausted, an official in the ministry of Energy and Mineral Development has said.

Irene Batebe, a Petroleum Officer in charge of the Refinery Project at the Petroleum Exploration and Production Department, says there are plans to import crude oil to keep the refinery operational.

She said there is a potential of more oil discoveries in neighbouring countries such as Democratic Republic of Congo and Kenya in addition to existing discoveries in countries such as South Sudan that could be imported to feed the planned refinery in Hoima.

Batebe explained that the option would also benefit from the pipeline project, which oil companies are presently planning to build to export the discovered oil. She said the same pipeline, once built, would be used to import the crude once the reserves in the country are exhausted.

Uganda has a confirmed oil reserve of 3.5 billion barrels, though experts say only about half of it would be removed from the ground, a process that is likely to start in 2016 and last 25 years.

Unless more oil is discovered, the refinery whose construction is estimated at about 2 billion dollars would become idle.  The situation would also mean a dilemma for the planned associated industries of petrochemical products such as plastics and paint.

Perhaps cautious of the dilemma, Kabagambe Kaliisa, the permanent secretary in Ministry of Energy has said there is need to sustain the oil production and avoid fast resource depletion. He also said that there is still a possibility of more oil discoveries in the country, a feat that could potentially extend the production period to beyond 25 years.

He explained that government was emphasising that the plans that oil companies are presenting for producing the oil should show what percent of the resource they are capable of removing from the ground to ensure optimal exploitation.

The experts say the present discovery of 3.5 billion barrels is from only 40 percent of the areas with the potential to have oil.

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