Uganda's Mega-Oil Project to Cost $20 Billion, Bring in $96 Billion in Revenues, Analysts Say

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The projected cost for Uganda to become an oil-producing country continues to rise. Jimmy Mugerwa, country manager of Tullow Oil (OTC:TUWOY) (London, England), said the investment required to exploit Uganda's oil resources is about $20 billion. This is nearly the total of the country's gross domestic product (GDP).

View Project Report - 300148358 300102385 300123791 300023904 300035994 300102382 300102383

Addressing the 19th annual seminar of the Certified Public Accountants of Uganda, Mugerwa said: "We have now concluded the exploration phase. We expect the development phase to take another three years--that's if production licenses are issued fast enough."

Investments would include setting up an oil refinery; building the world's longest continuously heated and insulated 24-inch crude export pipeline; and land acquisitions. The project would require more than 250 megawatts (MW) of power when in full operation, to heat more than 1,400 kilometers (km) of crude oil pipeline; more than 1,200 heavy trucks to transport more than 800,000 tons of steel and pipes; and other logistics.

The investment would include establishment of an international airport in Hoima for passenger and cargo planes. Various road networks also would be required.

Oil companies are expected to make their final financial investment decisions in December 2015. If they finally agree to invest, it will take another three years for the procurement of infrastructure and engineers, which means oil production would begin in 2019, Mugerwa said.

He said the project would require 170,000 cover rolls, safety boots and glasses. It also would require more than 200,000 tons of cement and iron bars.

Uganda could reap more than $63.5 billion from the 75% oil-sharing agreement during a 25-year period. Total net revenues during the 25 years are expected to reach $96 billion.

For related information, see September 3, 2014, article - Uganda Works to Recover More Domestic Oil, May 12, 2014, article - East Africa Could Take Leading Role in Oil and Gas, and May 9, 2014, article - Uganda Looks to Refinery, Pipeline and Power Projects.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.