Uganda reaches key milestone in oil production

Uganda is to commission the first of its four planned oil drilling rigs and start drilling the first production well, its petroleum agency said.

This a key milestone as the country races to meet its target of first oil output in 2025.

The East African nation discovered commercial reserves of petroleum nearly two decades ago but production has been repeatedly delayed by a lack of infrastructure like a pipeline.

"Today we mark another milestone and move a step closer to first oil with the launch of the drilling of development and production wells for the Kingfisher oil fields," government-run Petroleum Authority of Uganda (PAU) said on Twitter.

PAU, which regulates the petroleum sector, said President Yoweri Museveni was due to officiate "at the Spudding (drilling) campaign launch" at a site in Kingfisher project area, one of the country's two commercial oil development areas.

Kingfisher, located near the southern flank of Lake Albert in the country's west, is operated by China's CNOOC. Uganda's second project area, Tilenga, located north of Lake Albert astride River Nile, is operated by France's TotalEnergies.

The two firms co-own all of Uganda's existing oilfields alongside the state-run Uganda National Oil Company (UNOC).

At peak, Uganda plans to produce about 230,000 barrels of crude oil per day.

The rig due to be launched on Tuesday, will be used to drill a total of 31 wells in Kingfisher while three rigs to be deployed later in Tilenga project area will drill a total of 426 production wells, according to the Ministry of Energy and Mineral Development.

Uganda's crude reserves are estimated at 6.5 billion barrels, of which 1.4 billion barrels are recoverable.

The country will export its crude through an electrically heated, 1,443-km pipeline from the oilfields to neighbouring Tanzania's Indian Ocean seaport of Tanga.