Uganda’s first oil still on track for 2026

Uganda’s First Oil could still arrive before the end of 2026, with well drilling already ahead of target even as construction of key processing facilities races to the finish line, oil officials said last week.

Uganda has drilled 228 oil wells against a threshold of 170 required for First Oil, according to Andrew Ssennabulya, Senior Facilities Engineer at the Petroleum Authority of Uganda (PAU).

The remaining work is fitting production tubing into the wells, a faster process than drilling itself. The bigger constraint is infrastructure. The Central Processing Facility (CPF) at the $6 billion Tilenga project, run by TotalEnergies EP Uganda in Buliisa district, was 68.6 per cent complete by the end of July, short of the 80 per cent threshold PAU says is needed before pre-commissioning can begin.

By contrast, the CPF at the $2.5 billion Kingfisher project, operated by CNOOC Uganda Limited in Kikuube District, is 99 per cent complete and being commissioned. The $5 billion 1,443-kilometre East African Crude Oil Pipeline (EACOP), which will carry Uganda’s waxy crude heated to 50°C and will be the world’s longest heated pipeline, is 91 per cent complete.

“The three flagship projects – Tilenga, Kingfisher and EACOP – must be ready for us to announce First Oil, because they are synchronized,” said Ali Ssekatawa, PAU’s Director of Legal and Corporate Affairs.

At peak output, Tilenga is expected to produce 190,000 barrels of oil per day and Kingfisher 40,000 bpd, a combined 230,000 bpd. Both facilities will also separate gas and water from the crude, generate power for on-site operations and produce Liquefied Petroleum Gas (LPG).

Excess electricity from Tilenga will feed into the national grid via an underground cable linking the project to Kabale, PAU’s manager for Cost Monitoring, Angela Nalweyiso, said. The link is designed to run both ways, drawing power from the grid during periods of lower gas output.

Bank of Uganda Governor Michael Atingi-Ego told stakeholders that the country’s current account balance should swing into surplus within three to four years on the back of oil exports.

A refinery, to be built in the Kabalega Industrial Park, remains in the design phase, with a Final Investment Decision expected next year. The sector’s advance is already visible beyond the well pads. Petroleum-linked revenue – including Capital Gains tax, surface rental fees, licensing and training fees, and royalties – flows into a dedicated Petroleum Fund.

Uganda’s Parliament approved the release of Shs152 billion from the fund in May 2024 to build Hoima City Stadium, the fund’s largest disbursement to date. Oil-sector infrastructure has also delivered the Kabalega International Airport and new roads across the Albertine graben.

With production nearing, regulators and the judiciary are moving to head off legal risk to the sector. PAU, UNOC, the Bank of Uganda and the Uganda Revenue Authority ran a training for judicial officers on August 3, followed by a week-long tour of oil and gas operational areas, to prepare courts for the petroleum disputes First Oil is expected to bring.

Chief Justice Flavian Zeija said investor confidence hinges on how quickly courts resolve disputes, and urged judges against reflexively halting major projects with injunctions.

“That would be equivalent to treason,” he said of the prospect of enjoining a project like Tilenga or Kingfisher. The government is also building a domestic skills pipeline for the sector.

The Uganda Petroleum Institute, Kigumba, which can host up to 300 students and has trained both Ugandan and Tanzanian nationals, is set to formalise a partnership with the Judicial Training Institute, the Chief Justice announced during the visit.

Officials say national content requirements are already generating jobs for Ugandans in the sector, while project-affected persons have been compensated and resettled ahead of construction.