Oil Joint Venture Partners Contract Engineering Design Study Top story


In short
The launching of the study has been viewed as another landmark decision that could see Uganda in commercial Oil production in the next three years.

Oil Joint Ventures TOTAL, CNOOC and Tullow have signed agreements with engineering firms to provide engineering designs for oil wells located in Nwoya and Bulisa district ahead of planned oil production by 2020.

The designs also technically known as Front-End Engineering Design (FEED) will determine whether the Joint Venture finally makes a decision to invest in production in Uganda or what is also known as a final investment decision.

The outcome from the study could pave way for construction of pipelines in Bulisa and Nwoya as wells a central process area where oil will be refined ready for export through Tanga in Tanzania.

The USD 7.5 million deal will be under taken by French Company Flour partnering with China's Petroleum Engineering and Construction Corporation (CPEEC). The other contractor is Techchip from France and Chicago Bridges and Iron Company (CB&I) based in United States.  

Energy Minister, Engineer Irene Muloni said the deal was another step in Uganda's long journey towards commercial oil production She tasked contracted engineering firms to ensure that they complete the work on time in order to meet the 2020 deadline.

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Government had originally expected commercial oil production by this year but the timeline has now shifted to 2020. Muloni says the Joint  Venture Partners have up to end of this December to make a final investment decision as par the production license they received in August last year.

Muloni said with all the laws and institutions in place, Uganda is now ready take the journey toward final oil production.

Total E&P Uganda General Manager, Adewale Fayemi signed the contracts on behalf of other Joint venture partners CNOOC and Tullow. He said they decided to choose three companies to go through the Front-End Engineering Design (FEED) competition as part of fast-tracking the process.

At the end of it, one company will be chosen to undertake the next stage that will involve engineering, procurement and construction for the thirty three oil wells in Bulisa and Nwoya.

Fayemi says at the end of the year they will come out with the design for a facilities required to  process 200,000 barrels oil at the Central Processing facility.

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The contracted  Front-End Engineering Design (FEED) firms will not work in the exploration area under a license held by China National Offshore Oil Corporation CNOONC in Uganda. China National Offshore Oil Corporation CNOONC holds a license in Kingfisher oil wells located in Hoima district.

CNOOC officials were present at the launching of the Front-End Engineering Design as joint venture partners but no explanation was made as to why the Kingfisher area is not part of the process.

The Chinese Corporation owns  the second larges stake in Uganda's oil industry after Tullow agreed to sell most ts of its shares to Total E&P.