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Uganda expects first oil production to be delayed to 2022: minister

Reuters  |  NEW DELHI 

By and Promit Mukherjee

NEW DELHI (Reuters) - expects to begin producing in 2022, its minister said on Wednesday, indicating a slight delay from the east African country's revised target of 2021.

discovered crude reserves more than 10 years ago but production has been repeatedly delayed by disagreements with field operators over taxes and development strategy.

A lack of infrastructure such as a and a refining facility have also held up output.

"Production we are now looking at by 2022, our first production, from Kingfisher and Tilenga blocks," told on the sidelines of the Petrotech conference.

China's and France's Total and London-based have the stakes in the two areas. is the operator of Kingfisher area while Total leads the development of Tilenga.

"We are preparing for production. We have to build a pipeline for exports and a refinery to add value. So unless those two projects are done we can't start producing," she said.

In April last year signed a deal with a consortium, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost between $3 billion and $4 billion. The refinery is expected to be operational by 2023.

Muloni said land-locked Uganda, which imports refined fuel, would announce its next exploration licensing round in May.

A final investment decision for the refinery will be taken by September 2020 and the project is expected to be completed in three years time, she said.

A crude export pipeline, which passes through Uganda's neighbour Tanzania, with a capacity to transport 260,000 will be built by 2022, Muloni added.

Emmanuel Simon Gilbert, at Development Corp, said expects to take a 15-25 percent stake in the planned 1500 kilometre pipeline, which he said was estimated to cost around $3.5 billion.

Uganda will also take a stake in the pipeline project with the majority share being held by Total, he said, adding that the inter-governmental agreement between the two nation has to be signed before moving to a next stage.

"Ugandan oil is heavy and you need to install heaters along the way at 4 or 5 different locations ... So it is a bit challenging," he said of the planned pipeline.

(Editing by Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 19:13 IST