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 Uganda Uncertain of 2018 Oil Target

The Central Bank of Uganda said it remains uncertain whether the country will be able to produce its first commercial oil by 2018 as previously forecast due to a slump in global prices as well as the higher costs of developing its waxy reserves.

The Bank was quoted in a report seen by Platts that going by the bank’s monetary policy report for April, oil production might be pushed back from 2018, given that the profitability of oil investments may remain depressed for the foreseeable future.

The report also said the global oil price outlook places a large question mark over the speed at which Uganda’s oil resources can now be developed, especially given that its proven oil reserves are waxy, which increases the cost of moving them to the coast.

It will be recalled that last month, UK-based Tullow Oil cut its labour force in Uganda due to low global oil prices and delays by the government in awarding production licenses.

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