CNOOC Gets US$2Billion Oil Production License

2031 Views Kampala, Uganda

In short
Minister Lokeris says Kingfisher oil well has an average of 635 million barrels of which 196 million barrels are recoverable. He added that the field will be developed to produce between 30,000 to 40,000 barrels per day.

The Ministry of Energy and Mineral Development has given Chinese Oil Company, CNOOC, a license to start field studies of oil production at Kingfisher oil well.
 
This is the first oil production license to be issued after the exploration licenses that were issued to the oil companies, indicating that the country is finally nearing the development phase of the oil sector.
 
While issuing the license, Peter Lokeris, the State Minister for Minerals said government had put a condition on the license in February 2012, which would only be lifted after the oil companies submit an acceptable field development plan and petroleum reservoir report. According to the minister CNOOC Uganda submitted the requirements in 2012, which were reviewed and accepted by government leading to the issuance of the new license last week.
 
Lokeris says Kingfisher oil field located in Buliisa district, has an average of 635 million barrels of which 196 million barrels are recoverable. He added that the field will be developed to produce between 30,000 to 40,000 barrels per day.
 
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When asked whether it is not a bad deal for the government to have 196 million barrels recoverable from 635 million which is 31 percent recovery rate, Ernest Rubondo, the commissioner of petroleum said the recoverable oil around the world stands at 30 percent. Rubondo added that as the field is developed, more information is obtained which facilitates the better understanding of the field.
 
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According to Lokeris, developing the Kingfisher oil field will cost two billion dollars over a four-year period. Jin Weigen, the vice president CNOOC is excited about the production license saying it is a milestone for the company and government of Uganda. He pledged to work closely with other stakeholders to improve the performance and competitiveness of the oil industry in Uganda.
 
Weigen said the company has implemented a favorable corporate social responsibility program which included awarding best performing students, donating aid, supporting schools and other infrastructures around exploration areas.
 
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CNOOC got shares in Uganda’s oil after a farm down in February 2012 by Tullow. Tullow sold some of its assets to CNOOC and Total making the three companies joint partners with equal rights to undertake exploration, development and production in the Albertine Graben.