Oil companies seen investing $8 billion to start Uganda output

KAMPALA, Uganda (Bloomberg) -- Uganda expects three oil companies to invest $8 billion in the East African nation before they start producing oil in 2020, Energy Minister Irene Muloni said.

The government on Tuesday issued production licenses to London-based Tullow Oil and Total of France and said that together with Cnooc, the state-owned Chinese producer, the country expects to pump as much as 230,000 bopd.

“The companies are expected to invest over $8 billion in the infrastructure required for all the production licenses,” Muloni said in the capital, Kampala. “This investment will be for the drilling of about 500 wells, construction of central processing facilities and feeder pipelines, among others.”

The companies are expected to make their final investment decisions within 18 months, Muloni said. The licenses will run for 25 years, with the possibility of them being renewed for a further five years, she said.