63 wells in Tilenga and 9 in Kingfisher have been drilled. (Image source: Adobe Stock)

Uganda’s journey towards its first oil production by 2025 is on track, with critical milestones achieved in the Tilenga and Kingfisher projects, Ruth Nankabirwa Ssentamu, the Minister for Energy and Mineral Development, announced at a press conference for the media

She confirmed that 63 out of the planned 426 wells in the Tilenga project have been successfully drilled, surpassing the target necessary for first oil. Additionally, 9 out of the 11 wells required for first oil in the Kingfisher project have also been completed.

In addition to the drilling achievements, the Minister pointed out other critical developments, including the near completion of civil works at the Tilenga Industrial Area and the ongoing construction of the Central Processing Facility (CPF) at both the Tilenga and Kingfisher sites. These facilities are vital to Uganda’s oil production capacity and are expected to be fully operational in time for the first oil.

Speaking at the Ministry of Energy and Minerals offices in Kampala, Hon. Dr. Nankabirwa underscored Uganda's progress in the oil and gas sector as a testament to the country's determination to become a key player in the global oil market.

She emphasised that the Tilenga and Kingfisher projects, which are critical components of Uganda’s oil development strategy, are advancing steadily. With 63 out of 426 wells completed in Tilenga and 9 out of 11 in Kingfisher necessary for first oil, Uganda is firmly on track to achieve first oil by 2025.

The Minister also highlighted the strategic importance of the East African Crude Oil Pipeline (EACOP) and the Uganda Refinery, noting that these midstream projects are crucial in ensuring that Uganda maximizes the economic benefits from its petroleum resources.
“Our integrated approach, which includes the upstream, midstream, and downstream sectors, positions Uganda to significantly contribute to the global oil supply, fostering economic growth and boosting national revenue,” she said.

Nankabirwa also reaffirmed the government's dedication to balancing economic growth, social development, and environmental conservation as the country navigates its path to prosperity. "Uganda's leap in economic growth is partly based on the development of its oil and gas resources, which, once commercialized, will significantly impact all Ugandans," she noted.

“These developments are not only pivotal for Uganda's economy but also have significant implications for the global energy market. Uganda’s oil reserves, estimated at 6.5 billion barrels with 1.5 billion barrels recoverable, are set to make the country a key player in the global oil industry. The successful completion of these projects will ensure a stable and reliable supply of energy resources, contributing to global energy security.”

Nankabirwa emphasized Uganda’s commitment to transparency and sustainability, highlighting the ongoing review of the National Oil and Gas Policy to align with the dynamic global environment. "Balancing economic growth, social development, and environmental conservation remains a priority as we navigate our path to prosperity," she said.

The enlarged Africa Oil is expected to have significant scale. (Image source: Adobe Stock)

Africa Oil Corp has announced its financial and operating results for the three and six months ended 30 June 2024

Africa Oil president and CEO, Roger Tucker, said,“It was an incredibly busy first half of the year as we signed three strategic transactions, taking Africa Oil towards the next phase of value creation and shareholder returns. We have high-quality development projects, high-impact exploration and appraisal catalysts that will all be funded on completion of these deals. The quality of our organic growth opportunity set is demonstrated by the size and calibre of our partners.

"The Prime consolidation once closed, will see the roll-out of a new transparent capital allocation framework and will create scope for a significantly enlarged capital returns programme for our shareholders. Africa Oil stands with a differentiated investment case of offering sustainable shareholder returns, significant organic growth opportunities, and is well-positioned to pursue new opportunities on the back of a strong balance sheet.” 

According to a definitive agreement for proposed reorganisation with BTG, Africa Oil will hold 100% of Prime with BTG Oil & Gas receiving newly issued common shares in Africa Oil, representing approximately 35% of the outstanding share capital of the enlarged Africa Oil. This move aims to create a strong and differentiated upstream oil and gas company. The enlarged Africa Oil is expected to have significant scale with robust long-term free cash flows and a low leverage balance sheet, driven by large-scale and high netback assets in deepwater Nigeria. This will be complemented by funded development and exploration projects in the prolific Orange Basin.

Completion of the proposed reorganisation is targeted to occur during or before Q3 2025 and is subject to, among other conditions, Africa Oil shareholder approval, customary consents and approvals from the Nigerian authorities, the TSX and Nasdaq Stockholm, completion of the previously announced farm-down of Africa Oil’s Namibian interests that are held via Impact, and a reorganisation of the holding structure of BTG Holding to implement the amalgamation agreement. 

Namibia: Venus opportunity in Orange Basin 

In Namibia Orange Basin, the drilling and test results from Venus-1X, Venus-1A, Venus-2A and Mangetti-1X (Venus interval), completed in 2023 and H1 2024, support the development of the Venus oilfield. The technical studies to be carried out during 2024 are expected to define the Venus development concept.

In addition to the Venus opportunity, the company has retained upside exposure to appraisal and exploration opportunities that, in a success case, could significantly increase the existing discovered resource base on Blocks 2912 and 2913B. Processing of data from the 3D seismic data survey that was completed during H1 2024, could better define the prospectivity on Block 2193B to the south of the Venus discovery. The joint venture will consider drilling further high-impact exploration wells on separate fan structures on this Block in late 2024 or 2025 once the 3D seismic interpretation work is completed. The Mangetti-1X exploration well, located approximately 35km to the Northwest of the Venus-1X well, also intersected hydrocarbon bearing intervals in the Mangetti and Venus fans. The operator has commenced planning of a well to appraise the Mangetti Fan.

Nigeria: High production efficiency 

The Agbami field in Nigeria has delivered higher production efficiencies and lower decline rates than planned during H1 2024. The operator has also rescheduled planned maintenance from H1 2024 to H2 2024 resulting in production exceeding plan for both Q2 2024 and H1 2024. The asset remains on target to meet or exceed its production plan for 2024. The Agbami 4D M3 seismic acquisition survey started in Q2 2024. The survey is expected to conclude during Q3 2024, which will be followed by processing of the seismic and detailed planning of the proposed drilling campaign expected to commence late 2025/ early 2026. 

Last year, Dangote Petroleum Refinery and Petrochemicals plant purchased 1 mn barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited.

The Egina field has also performed above plan during H1 2024 as a result of higher production efficiency than forecast.

In Q2 2024, the Akpo FPSO celebrated 15 years LTI-free. During H1 2024, two new producers and one injection well were brought online at Akpo West, a subsea tie back to the Akpo FPSO. Both of the new production wells are producing above expectation. H1 2024 production at Akpo has been impacted by the planned one-month maintenance outage. Full field production resumed from the shutdown in mid-April, with production rates at the end of Q2 2024 over 16% higher than the production rates at the start of 2024, primarily as a result of the successful infill drilling campaign.

The commitment to the drilling rig has been extended, allowing drilling to continue across the Akpo & Egina fields through 2025. An extensive seismic acquisition campaign was completed in Q2 2024, with surveys taken in Akpo, Preowei, and Egina. The seismic acquisition campaign has established a baseline survey for the Preowei field, and 4D monitor surveys for Akpo and Egina. The latest 4D surveys will be used to guide the infill drilling program and to assist with reservoir surveillance activities.

The first phase of the Preowei Field front end engineering design (FEED) was completed in Q2 2024, with phase 2 expected to be concluded in Q3 2024. FEED studies are aimed at supporting a FID decision on the project and enabling Engineering, Procurement, Construction and Installation (EPCI) to commence in 2025.

South Africa: Drilling in 2025

The company acquired an additional 1.00% interest in Block 3B/4B in South Africa from Eco. It also announced a farm down agreement for Block 3B/4B with TotalEnergies and QatarEnergy, which includes the transfer of operatorship of the Block to TotalEnergies for a total consideration, including the carry, of up to US$46.8mn. The closing of both transactions is subject to government approval and is expected in 2024. On completion of these transactions, the company will retain a non-operated 18.00% interest in the Block.

Subject to obtaining the requisite approvals, the first exploration well on Block 3B/4B could be drilled during 2025.