On 01 February 2022, Total Energies EP Uganda, CNOOC Uganda Limited, the Uganda National Oil Company (UNOC), and the Tanzania Petroleum Development Corporation (TPDC) announced the Final Investment Decision on the Lake Albert Development.
The journey to FID started in 2006 with the confirmation of commercial oil and gas resources in Uganda. Since then, the government focused on developing the required institutional and regulatory capacity to sustainably manage the oil and gas sector while promoting investment, skills development including establishing a specialized petroleum institute to train Ugandans in petroleum aspects. Uganda thus boasts of progressive laws and regulations, which were benchmarked from other oil-producing countries.
FID is the most crucial stage for developing a project that comes after a long-travelled road. For Uganda, it is one of the most important steps in the country’s journey to First Oil as it denotes that Uganda’s oil and gas sector remains profitable and has surmounted the challenges of unstable crude oil prices caused by the global COVID-19 pandemic. FID, further signifies the commitment by the participating oil companies to invest over US$ 10 billion making it the highest single value project in the country.
The announcement marks the beginning of the detailed Engineering, Procurement and Construction (EPC) phase by the Joint Venture Partners and, therefore, a commitment to see first oil by 2025. During this phase, Ugandans who are prepared and equipped with the relevant skills will enjoy significant benefits and opportunities from the sector through local content with over 16 fields ring-fenced for local entities.
Licensees have submitted to the Petroleum Authority of Uganda for approval before award, contracts valued at US$ 6 billion for over 40 work packages for the Tilenga, Kingfisher and EACOP projects. The Scope of companies being regulated by the Authority is widening and includes world-class contractors who are setting up physical presence in Uganda. The opportunities for investment in the country’s sector are thus numerous. The Joint venture partners also committed to ensuring environment and social protection in the development of the projects.
The announcement of FID is a significant milestone for the country. It comes with many responsibilities for the stakeholders involved in the management and development of the country’s oil and gas sector and also presents numerous opportunities for Ugandans and investors.
The Centurion Law Group & Centurion Plus- Uganda
Our Energy, Natural Resources & Infrastructure practice provides clients with a full array of services across the energy and natural resources landscape, including renewable and conventional power, clean technology, oil & gas (including LNG), and mining. Our lawyers work closely with clients to ensure the successful structuring, development, financing, implementation, and operation of energy projects. Our market expertise and wealth of knowledge in these types of projects throughout the continent allows us to offer expert advice for bidding, acquiring, developing, and financing projects within these industries.