Kampala, Uganda — After confirming the discovery of 2.5 billion barrels of oil in 2006, Uganda has said it has discovered another 1 billion barrels of oil from at least three new oil wells.
This, according to Mr. Ernest Rubondo, the commissioner Petroleum Exploration and Production, Ministry of Energy and Mineral Development has increased Uganda's oil capacity to 3.5 billion barrels of oil as of September this year.
The discovery of more oil deposits is a clear indication that the country can go ahead with the planned construction of an oil refinery in Hoima, Western Uganda.
"From just three wells we have increased our oil barrels capacity to 3.5 billion," said Rubondo.
Uganda finally settled for the construction of an oil refinery rather than a pipeline, after it was found less cost effective with a number of advantages over the setting up of a 1950km pipeline to Dar es Salaam (southern route) or a 1325km pipeline to Mombasa (northern route) from the oil wells.
With the increasing discoveries, it's clear the refinery project will be viable.
The country will be able to reap $3.2b in profits within a period of 2.7 years after its construction.
"We have already identified the land to construct it. Compensations are ongoing," said Mr. Kabagambe Kalisa the Permanent Secretary in Uganda's Energy Ministry when contacted earlier in the year.
"The market exists in South Sudan, east DR Congo, Rwanda, Burundi and we can decide to go into direct competition with the Kenya Petroleum Refineries Limited for the western Kenya and Tanzania market," said Mr. Gerald Banaga the head of the Midstream Petroleum Unit at the Energy Ministry commenting about the viability of the refinery project.
He stressed the total operating costs for the refinery will be around $132 million, other than the $500 million for the pipelines and $110 million for land acquisition where the pipes would pass. Rubondo disclosed out of the 77 wells drilled so far, 70 have been proven to contain oil and gas. The oil fields, he added, are showing a comparatively higher level of productivity when measured against the experience in other countries where the chances of oil discovery in an equal number of wells usually lingers at only 10 per cent.
"And therefore, , $1.5 billion is the amount that has been spent in all the activities leading to the 3.5 billion barrels discovery," noted Rubondo.
Rubondo stressed exploration is still ongoing and more discoveries are expected along the way. Before the discovery of the additional one billion barrels, the country's exploration efforts in the Albertine Graben showed estimated oil and gas reserves of 2.5b barrels. Uganda's crude oil has less sulphur.