Home » Breaking News, Uganda News » Cost of Finding Oil in Uganda is Less Than a Dollar

By Mirembe Martina

To find oil in Uganda, it costs less than a dollar compared to global standards.

According to the commissioner in the petroleum and exploration department, Ernest Rubondo, the cost of finding oil on the international scale is $5 per barrel unlike Uganda which is less than a dollar.

A new view of the Murchison falls where Tullow oil is set to drill.

“On the global scale the finding cost range between $5 and $25 per barrel,” he said. “Uganda competes favorably with a finding cost of less than one dollar per barrel,” he added.

This explains why investors are flocking the country to have a piece of the cake.

A total of 71 oil wells have been drilled and only three did not encounter hydrocarbon which means over 90% success discovery rate. This makes Uganda be in the league of oil-producing countries like Peru, Trinidad & Tobago, Dendmark, Italy and Romania in Latin America and Europe. In Africa, Uganda joins Chad, Congo Brazavile and Tunisa. In Asia, Uganda falls in the group of Brunei and Thailand.

Rubondo went on further explain that the oil and gas industry is very capital-intensive and high risk. “Efforts are now being made to commercialize the discovered resources, initially though power generation and subsequently through refining the crude oil,” he said.

“A study to evaluate development of pipe lines and storage facilities for crude oil and gas in Uganda has been concluded,” he added.

So far, the risk capital invested in seismic surveys, exploratory and appraisal drilling amounts to $1.4b.

Fred Kabagambe-Kaliisa, permanent secretary in the ministry of energy and mineral development, said over 80 international oil companies have applied for licenses. “The national oil and gas policy is the key policy document guiding the developments in the sector and it is crucial benchmark for governance of the oil and gas industry,” he said. “Government is committed to working with all stakeholders to ensure effective and efficient development of the sector to benefit all Ugandans,” he added.

Some of the companies which have applied for the licenses include Waraga, Kingfisher, Nzii and Mputa fields which are currently under review.

Kabagambe said that there has been increased engagement with civil society, parliament, local communities and their leaders and the media. “Oil companies are being compelled to employ Ugandans and give business opportunities to Uganda companies,” he said. “There has been increased training for Ugandans in oil and gas professions abroad from both public and private players.”