Uganda: NEMA Holds Key to Early Oil Production Scheme

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New Vision (Kampala)

3 August 2008
Posted to the web 4 August 2008

Ibrahim Kasita
Kampala

The National Environment Management Authority (NEMA) will examine and make a final decision on the Early Oil Production System (EPS) before the end of August.

A go-ahead from Dr. Aryamanya Mugisha, the NEMA executive director, is needed for the project to proceed.

"This public hearing will decide the approval or disapproval of the EPS.

"The public hearing report will be scrutinised before a decision is made before the end of August," Mugisha said.

The scope of the EPS that will be based in Kaiso-Tonya includes oil production of 4000-5,000 barrels of oil per day, a mini-refinery, which will produce diesel, kerosene and a large proportion of heavy-fuel diesel.

It will also include a 50-85 megawatts heavy-fuel oil thermal power plant, a transmission line from Mputa to Fort-Portal and Nkenda and a distribution power network from Kaiso-Tonya to Hoima.

Tullow Oil, the firm exploring for oil and gas in western Uganda, has already partnered with Jacobsen Elektro, a Norwegian firm, to build and operate the thermal plant.The firm has already applied to the Electricity Regulatory Authority for a generation licence.

Tullow plans to invest over $200m (about sh336b) in exploration this year.

This money will be used for onshore and offshore drilling, seismic surveys and the anticipated sanction of the EPS.

The programme is also targeting significant oil resources with the ultimate aim of exceeding the threshold required for full development and exportation to the international market.

NEMA last week conducted a public hearing for the proposed EPS in Kaiso-Tonya area to discuss the environmental issues.

The hearing was held at the Riviera Hotel, Hoima.

Various stakeholders including the energy ministry's petroleum exploration and production department, the Uganda Wildlife Authority, the water and environmental ministry, environmental non-governmental organisations, local communities and the district officials attended.

"Let us support the project because we shall be able to get petroleum products, job opportunities, build infrastructure and get business opportunities," Henry Kajura, the second deputy prime minister and minister of public service, said.

"The oil discoveries have opened up opportunities. Whatever we produce has a ready market. We cannot go back but look forward to utilising resources for the development of the country."

Kabagambe-Kaliisa, the energy permanent, said the future of the oil and gas industry in the country was bright "because the prospects are very good."

"The EPS is the beginning of the long road to production.

"We still need to do more to realise full scale commercial production," he said.

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