By Tom Oniro Elenyu In Kampala
Just as the clock ticks into Uganda joining the oil-producing club, it has emerged that Africa is a commodity superpower. Petroleum and gas deposits are reported abundant in North Africa; oil, gold and iron ore are prevalent in West Africa; diamonds, cobalt and copper are resourceful in Central Africa; gold, uranium and natural gas can be mined in East Africa whereas there is plenty of platinum, coal, manganese and diamonds in Southern Africa.
“Africa,” in sum, according to Commodity Trader, Jack Prandell who writes daily Insights on Global Commodities Markets, “is the backbone of energy, fertilisers, EV batteries, defence metals, precious metals, cobalt, uranium, platinum, copper, gold and oil.
“In a fragmented world,” Prandell says in the 20 February post on X, “supply chains run through Africa.” Africa, it is said, holds major oil and gas reserves and yet critical minerals are still emerging.
In the same month of February, Uganda’s Energy and Minerals’ minister, Ruth Nankabirwa declared: “The clock is ticking; the commercial oil [production] target is clear and the mission is non-negotiable.” Nankabirwa was in a field visit to the oil-producing region with key stakeholders to assess progress toward the “July First Oil”.
Uganda’s oil journey has seen rolling deadlines since the black gold discovery in June 2006. The initial deadline was set for 2012, and has since been rolling uncontrollably.
On 1 February 2022, however, Uganda’s oil and gas sector achieved a historic breakthrough when Uganda and Tanzania witnessed the signing of the Final Investment Decision (FID) by the Joint Venture Partners; Total Energies-Uganda, China National Off-shore Oil Corporation (CNOOC) Uganda Limited, Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation. This pivotal moment unlocked massive investment and set both countries firmly on the path of commercial oil production. FID is the confirmation by all investors in the deal of their commitment under a shareholders’ agreement to invest equity. The FID unleashed an unprecedented US$15 billion investment flow into Uganda’s economy; making it the largest project by value in Uganda and the entire East African region. This milestone did more than pave the way for transformative infrastructure; it cemented Uganda’s place on the global energy map. Established in 2015, UNOC is the state-owned steward tasked with turning oil dreams into sustainable realities.
According to the Uganda Chamber of Energy and Minerals, on 24 January 2023, Uganda made a double score when its partners in oil and gas commissioned the first-ever oil-drilling operation in the Kikuube district, mid-western Uganda and, on the other hand, EACOP was issued with a licence to start work. These milestones signify that the country’s oil and gas journey is on the track.
And in February 2026, Uganda’s oil journey finally reaches the FID milestone; unlocking unprecedented US$15 billion investment.
“The development of Uganda’s oil sector has experienced timeline adjustments over the years, primarily due to the scale and complexity of the upstream facilities and export infrastructure. The current target for first commercial oil remains the second half of 2026. Government, joint venture partners and EACOP are focused on the second half of 2026 as the target for first oil production, reflecting progress at both the Tilenga and Kingfisher fields, and on the East African Crude Oil Pipeline (EACOP),” EACOP management told Pan African Visions in an interview.
With actual export revenues expected to follow soon after as the EACOP pipeline and market delivery mechanisms are fully operational, says EACOP management, current projections for peak production capacity from Uganda’s Lake Albert Graben; primarily from the Tilenga and Kingfisher developments are approximately 240,000 barrels per day (bpd). “This figure represents the combined output once all fields are ramped up,” says EACOP.
CNOOC and Total Energies are Uganda’s Joint Venture Partners. UNOC represents Uganda in the partnership. CNOOC operates the King Fisher Development Area whose rig is drilling already. Total Energies is the operator of the Tilenga project with both projects located in the Albertine Rift, Western Uganda. Born on 15 November 1955, Total Energies is a broad-energy French company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables and electricity.
CNOOC Uganda Limited is a subsidiary of CNOOC Limited, an upstream company engaged in oil and gas exploration and production. It entered the Ugandan market after the acquisition of the one-third interest of Tullow’s Assets in Uganda in 2012. Tullow has since exited Uganda’s oil and gas market.
EACOP is upbeat that the oil and gas sector is expected to drive transformational impacts on the Ugandan economy, across several fronts; “Economic Growth: Oil production is expected to support elevated GDP growth rates. According to PAU [Petroleum Authority of Uganda], the development of Uganda’s oil and gas sector is expected to provide substantial economic growth for Uganda, with expected GDP growth of 10.4% in the first year of production (of which production from the Albertine Graben oil region is the single-largest catalyst). That growth is forecast to continue, with GDP growth of 9.4-10.4% in 2026/2027, 6.9% in 2027/2028, and 6.7% in 2028/2029,” EACOP tells Pan African Visions exclusively.
According to the Southern and Eastern Africa Trade Information Negotiations Institute’s Executive Director, Jane Nalunga, Uganda expects to generate roughly US$2 billion annually in oil revenue once production begins (targeted for 2025/2026), “but they indicated July 2026, with funds primarily designated for long-term investments…Key areas for this revenue include: infrastructure development (highways, railways, refineries), science and technology and reducing reliance on external debt”.
Asked if oil revenues will relieve citizens from back-breaking taxes, tax policy expert Nalunga says; “Chances are high that the government will not remove or reduce the rates under Indirect Taxes (Value Added Tax and Excise Duty) and even the direct taxes (Pay As You Earn [PAYE]), Local Service Tax and Property Taxes like Property Rate and Rental Income Tax (RIT)).”
She, however, says, “Yes,” Ugandans may rejoice, “[only] if the oil revenue is used for the benefit of Ugandans (improved service delivery like infrastructure, among others, and reducing on debt which is taking a lot of tax revenue to finance our debt obligations) which requires good governance (checking on corruption tendencies) among others;” before cautioning: “However, it should be noted that Uganda has only about 15% stake in the EACOP.”
According to EACOP management, revenue generation from crude exports via EACOP will bring foreign exchange earnings and fiscal revenues. “The Uganda Government projects government revenue from the oil and gas sector to total 1 –2.5 billion USD per annum. Under the Uganda Public Finance Management Act 2015, these revenues will support infrastructure development in the country. Approximately 1billion USD has been spent on the procurement of goods and services from local companies in Uganda and Tanzania in connection with the Pipeline project.”
In a 2 March statement, the Commissioner-General of the statutory tax body—Uganda Revenue Authority—John Musinguzi-Rujoki, said thus; “Uganda’s oil must deliver measurable value for its citizens. As we near first oil production, we are strengthening collaboration with key sector players to ensure clarity in administration and consider application of the law,” stated the tax collector; adding: “I met with Total Energies-Uganda and CNOOC Uganda Ltd to align on interpretation, revenue assurances and predictable compliance as the sector enters production. When institutions align early and sustain technical dialogue, natural resources become engines of fiscal stability, investor confidence and long-term nation-building.”
But the central reserve—Bank of Uganda—Deputy Governor Prof Augustus Nuwagaba has tip-toed on the much-hyped yet-to-be-oil revenues. “With oil production on the horizon, we must reduce our propensity for spending on consumption. Oil revenues will be more viable when spent on infrastructure, strengthening industry and creating long-term saving buffers. But above all, we need to use the resources that we have to build resilience,” the money-man said on 2 March. Uganda is a better-known consumer economy.
Uganda has an estimated 6.5 billion barrels of oil; with about 1.4 billion barrels recoverable, and peak production expected to surpass 200, 000 bpd. Gas resources are estimated at 600 billion cubic feet; with about 500 billion cubic feet recoverable.
Approximately $10 billion has already been invested in the sector; with an additional $400 million required annually to sustain operations. The country will retain some crude for domestic use as the rest are destined for refining at a foreseen $2.5 trillion refinery for the export market through EACOP via Tanzania’s Tanga Port at the Indian Ocean.
“Refinery 60,000 barrels per day [is] energy security for Ugandans; EACOP [is for] market profits,” PAU boasted on 2 March about Uganda building both a refinery and EACOP. In February, EACOP reached a defining milestone with the arrival of the final batch of pipes in Tanga completing the full 1,443km required to link Uganda to international markets. As the pipeline edges closer to operations, Uganda moves within reach of unlocking the $1-2.5 billion in annual revenues, as achievement that is set to trigger economic growth, expand infrastructure and create shared prosperity in East Africa.
Breaking down EACOP into granular details
The Uganda section of the total 1,443km length is 296km, Tanzania section is 1,147km covering 10 districts in Uganda, 23 districts in Tanzania. The key infrastructure are six pump stations with two located in Uganda, two pressure reduction stations located in Tanzania, 76 valves, 24-inch diameter pipeline, Heat-traced insulation to keep crude oil flowing, fully-buried pipeline for safety and environmental protection. The Marine Terminal in Tanga has 2-million-litre storage tanks, load-out facility extending for 2.7km into the Indian Ocean to export crude oil. The flow time of crude oil will take 1-2 months to flow from Hoima in mid-western Uganda to Tanga Port; depending on the flow speed. Smart technology in the pipeline includes a fibre optic cable for real-time leak detection and improved internet connectivity along the corridor.
And on 9 March, PAU added: “Uganda is gearing up for the first oil production, and the transformation is already visible on the ground. Major infrastructure upgrades are opening up communities, boosting trade and accelerating economic growth. Key roads [are] now completed. These strategic road networks [of 817km in total] are strengthening connectivity, unlocking opportunities for tourism and powering Uganda’s journey toward the first oil.”
Amidst all the aplomb, however, Prof Nuwagaba warns that the transition to oil production is likely risky, and could be Uganda’s inflection point. “The transition to oil production offers major economic promise, but also carries risks if poorly managed…To all of us who think this is going to be the God-given messiah to settle all our problems, that will be the greatest mistake,” Prof Nuwagaba said at the 5th Stanbic Economic Forum in Kampala on 20 February; fearing that inadequate public awareness could cause distortions in the economy.
In a 9 March statement posted on X, UNOC’s Chief Corporate Affairs Officer, Tony Otoa, says Environmental Impact Assessment (EIA)s are a critical part of responsible project planning because the EIA process enables the identification and evaluation of potential environmental and social risks before any project is implemented. “We conduct assessments of ecosystems, water sources, biodiversity and community dynamics to ensure that projects are designed and implemented in a responsible and sustainable manner,” Otoa said, continuing; “By integrating environmental considerations early in project planning and adhering to regulatory requirements, UNOC supports Uganda’s energy development while safeguarding ecosystems, communities and natural resources for future generations.”
Meanwhile, according to PAU’s Senior National Content Officer, James Musherure, “There are several upcoming contract opportunities in areas such as mechanical and electrical services, maintenance and support, inspection, production, operations and site logistics support.” Musherure told the 6 March Total Energies-organised suppliers’ workshop: “It is, therefore, critical for suppliers to prepare by strengthening their technical capabilities through international certification, maintaining compliant registrations and pursuing strategic partnerships including joint ventures and representation of Original Equipment Manufacturer (OEM)s.”
On employment and skills development, EACOP tells this publication that approximately 12,400 people, comprising EACOP employees and contractors, are currently directly engaged in the Pipeline project (80% in Tanzania, 20% in Uganda). The oil and gas sector [in Uganda] is expected to create 14,000 direct jobs and 42,000 indirect jobs. “Long-term strategic benefits,” EACOP foresees, “over its multi-decade lifespan, the oil sector—properly managed—could contribute significant export earnings, public investment resources and infrastructure development.”
Uganda sent a delegation comprising representatives from UNOC, PAU and Industry Enhancement Centre-Uganda to undertake a bench-marking visit to the Dangote Refinery in Lagos, Nigeria; the world’s largest single-train refinery with a capacity of 700,000 bpd. “During the visit,” says Otoa in an 11 February statement, “the teams shared insights into the project’s delivery model, financing structure, operational readiness and workforce development strategy. The engagement provided valuable lessons to support Uganda’s refinery development, particularly in strengthening governance, technical capability and large-scale project execution.”
In 2013, the government issued the first oil production licences for the King Fisher field to CNOOC. The licence paved way for the company to engage in technical works leading to oil production.The King Fisher project area holds 566,000 million bpd out of which 196,000 million will be recoverable at the rate of 40,000 bpd. The area is both on-shore and off-shore but directional drilling will be applied to avoid getting to Lake Albert which is a shallow lake and cannot sustain the operations.
CNOOC’s operation area has far-reaching tripartite implications for China, Tanzania, and Uganda. Overall, Uganda has 6.5 billion bpd in place with 1.4 billion bpd known to be recoverable. Uganda expects to produce 230,000 barrels daily at peak production.
The commissioning gave hope to Tanzania, a Joint Venture Partner in EACOP. EACOP is a legal entity and also a physical system that begins from Kabaale in Hoima and ends 1,443 km in Tanga. It will ship crude oil produced from Tilenga and King Fisher Project areas to overseas markets.
At the commissioning ceremony, Uganda’s Government issued a licence that gave a greenlight for EACOP development activities to commence. The Tanzanian licence was issued in February 2023.
The contractors adhered to the rules issued by PAU to make use of local goods, and services except in situations where the two are not locally available. The rigs, for example, were transported from Kenya’s Mombasa Port by local logistics companies and assembled at the project area in Kikuube by both Ugandan and Chinese engineers. This ensures technology transfer, one of the essentials for achieving National Content. All the Project Affected Persons have been compensated and the company continues with the livelihood restoration and construction of resettlement homes.
PAU Executive Director, Ernest Rubondo, said the CNOOC project created 92 contract jobs approved and valued at $1 billion; $270 million of which went to local companies in areas of civil works, ICT, medical, logistics and catering services.
The Hiccups
One of the hiccups to the activities in the oil fields was the stand-off between Tullow Oil and the Uganda government over Capital Gains Tax accruing from the Tullow farm-down of its interests. Concluding tax negotiations was a pre-condition to letting the farm-down reach its conclusion.
But another hurdle emerged: Joint Venture Partners Total Energies, and CNOOC terminated the farm-down on the basis of the expiry of the Sale and Purchase Agreements. The termination happened at the time the country expected the partners to announce the FID which had been rescheduled for the end of 2019, from an earlier timeline of 2017. COVID-19 pandemic, too, paused oil activities in Uganda.
Now from drilled wells to flowing crude, 2026, indeed, stands-out as a year of delivery, opportunity and national transformation.
But, as the future of Uganda’s oil and gas sector shapes up, borrowing from Nigeria’s Peter Obi is handy: “No country can progress if its politics is more profitable than its industries. In a country where those in government are richer than entrepreneurs, they manufacture poverty.”
*Culled from April Edition of PAV Magazine
