The China National Offshore Oil Company (Cnooc) oil well pads in the Kingfisher Oil Development Area are currently facing the effects of rising water levels from Lake Albert, which is claiming parts of the land earmarked for oil development.
The Kingfisher Oil Development Area, which is located in Kikuube and Hoima districts on the eastern shores of Lake Albert, will comprise of 31 wells (20 production wells and 11 water injection wells) to be drilled on four well pads.
However, out of the four well pads, three are currently submerged by water from Lake Albert. A well pad is a land site that an oil company uses to drill oil.
During a field visit to the oil filed recently, Zakalia Lubega, the head of Corporate Affairs at Cnooc, revealed that well pad one is currently fully submerged by water while the lake is eating into the land earmarked for the development of well pads two and three.
He, however, noted that plans are underway to secure the land from the waters where the well pads are, such that in the future even if the water levels rise, the well pads will not be affected.
"We are undertaking a number of studies like the Meta Ocean study, which we started about four months ago, where we are again studying the behaviour of the lake. Previously we undertook a hydraulic study for Lake Albert and other water bodies that are catchment to Lake Albert," Lubega said.
He added that even though these new plans of recapturing the affected oil well pads will impact on the project costs, they are not significant enough to stall the project's progress.
CONTRACTS ARE BEING AWARDED
Last month, the minister of Energy and Mineral Development Ruth Nankabirwa announced that Cnooc had taken its Final Investment Decision (FID) for the Uganda oil projects and they are now ready to invest in Uganda's oil industry.
This decision, therefore, paved the way for progress on contract awards. In the Kingfisher Development Area, most of the engineering procurement and construction (EPC) contracts are at the recommendation to award (RTA) stage, according to company officials.
These include EPC for well pads, EPC for supply base, EPC for oil facilities, EPC for feeder pipeline, main power generation, integrated drilling services, down hole pressure gauges, drill bits, coring, cutting and fishing tools, screens and blank pipes, oil country tubular goods and construction supervision for well pads, supply base and oil facilities.
"National content is one of the key issues which is critically measured and part of all the contracts. Even if some of the companies receiving these contracts are international companies, they are required to ensure that in the sub- contracting stages, there are aspects of national content and they co-opt Ugandan companies to undertake some of the services. But most of the companies that are going to do the supervision works are Ugandan companies," Lubega noted.
Lubega revealed that Cnooc has already awarded the contract for the construction of the well pads, where the contractor will begin mobilizing the site soon. The contract was awarded to Excel Construction Company Limited.
"We got conditional letters of award to the contractors for the construction of the central processing facility, infield flow line, safety check stations, feeder pipeline and other facilities around the oil field, which are only pending clarification on
a few issues; so technically we are into development," Lubega said.
He added: "When we make the official announcement of the Final Investment Decision, which is expected to be early next year, it will take us about 36 to 40 months to get to first oil but the target is 2025 to be able to get into first oil."