Representatives from the 3 joint venture partners including Maxine Mikoyan (Technip), Mike Cleaver (CBI) and Ashley Rees (Fluor) sign the design engineering studies framework as Energy Minister Eng. Irene Muloni (wearing a red top) looks on in Kampala on Tuesday evening
The three joint venture partners in the oil rich Albertine region CNOOC, Tullow Oil and Total E & P have signed the Front End Engineering Design (FEED) studies for the Nyowa exploration Area 1 and Buliisa exploration area 2 upstream projects.
The signing comes seven months after the three contractors were issued with oil production licenses by government.
The FEED studies are a significant stage of the oil extraction process which will see the joint venture partners develop the technical definition, cost and schedule estimates.
This is what the contractors will base on to make their final investment decision.
Fluor, a partnering company with China Petroleum Engineering and Construction Corporation will conduct the FEED along with another company Technip from France and Chicago Bridge and Iron (CBI) from USA.
The studies entail finalizing designs for the facilities like the Central Processing Facility required to process 200,000 barrels of oil daily as well as 400 oil wells and 200kms of access roads.
The signing was done by officials representing the companies including Maxine Mikoyan the Technip Vice President for Business Development in Western Europe, Mike Cleaver the Vice President of CBI and Ashley Rees the Managing Director of Fluor.
Two of these companies that will perform best during the first phase of engineering design shall then be invited to compete for the eventual Engineering, Procurement and Construction (EPC), as agreed in the earlier contract.
Government still maintains that it has set a target of producing its first oil in 2020.
The Energy Minister Eng. Irene Muloni who witnessed the launching of the FEED studies at Sheraton Hotel Kampala said; “This is a key milestone to deliver our oil by 2020. As government, we are anxious to see the process fast tracked.”
As per the terms of the production licenses issued to Tullow, CNOOC and Total, they have up to December 31 this year to make the final decision to invest in oil production.
“We are committed to handling this process in the most transparent and accountable manner so that this oil brings value to the people of Uganda and to the generations to come,” the Minister added.
She said government undertook a clear methodology to select the 3 contractors and is confident that Uganda will get the best for the EPC contract.
Regarding the contentious issue on developing a skilled local human resource capacity in the oil sector, Eng. Muloni made assurance that; “We sat with the joint venture partners and agreed that they develop a National Content Strategy for the Second Phase of the FEED studies to support local content capacity.”
This strategy will be one of the performance criteria selection for the contractor for Phase 2 and later, the EPC contract.
According to Muloni, the FEED studies will run concurrently with other activities whose contracts have already been awarded, including; environmental assessment, land acquisition and contracting plans for the Kingfisher upstream project.
Meanwhile, 40 companies expressed interest in the construction of the oil refinery out of which 8 were assessed.
From the 8, only 3 will be recommended.
The Minister said that by the end of next month, government will have identified a lead investor in the refinery.
, #Total E & P
, #Tullow Oil