September 2, 2008

Uganda: Environmental Body Yet to Approve Oil Production Scheme

Text of report by Ibrahim Kasitaby entitled "Early oil scheme not yet okayed" published by state-owned, mass-circulation Ugandan daily The New Vision website on 2 September

The National Environmental Management Authority (NEMA) has not yet approved the proposed early production scheme for oil by Tullow.

Arnold Waiswa Ayazika, the NEMA environment assessment coordinator, said: "There are issues that were raised during the review process and at the public hearing, which need to be resolved."

"They have to incorporate those issues in their environmental impact assessment report and bring back the final report before we make a decision. We have not yet issued an environmental certificate to Tullow," he said in a phone interview.

At a recent public hearing in Hoima [western Uganda], NEMA promised to examine and make a final decision on the project, which was supposed to supply the local market with affordable petroleum products by the end of last month (August).

A go-ahead from Dr Aryamanya Mugisha, the NEMA executive director, is needed for the project to commence.

The early scheme, which will be conducted in Kaiso-Tonya, includes production of 4,000-5,000 barrels of oil per day and a mini- refinery, which will produce diesel, kerosene and heavy-fuel diesel.

It will also include a 50-85mw heavy-fuel oil thermal plant, a transmission line from Mputa to Fort Portal and Nkenda and a distribution power network from Kaiso-Tonya to Hoima.

Tullow Oil has partnered with Jacobsen Elektro to build and operate the thermal plant. It has applied to the Electricity Regulatory Authority for a generation licence.

Tullow plans to invest over 200m dollars (about 328bn shillings) in exploration this year. This money will be used for onshore and offshore drilling, seismic surveys and the early production scheme.

The scheme is also targeting large oil reserves in order to exceed the threshold required for full development and exportation for the international market.

Tullow said oil discoveries at Lake Albert were getting closer to the threshold.

Originally published by The New Vision website, Kampala, in English 2 Sep 08.

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