Cnooc aims to make final decision on Kingfisher field by April 2019 — minister

The Uganda government and the China National Offshore Oil Corporation are looking at April 2019 for a final investment decision on the Kingfisher oil field, Irene Muloni, the minister of energy, said on Thursday.

Cnooc Limited is the main operator of the Kingfisher oil block in Exploration Area 3 in Kikuube district (formerly part of Hoima district). The block is expected to produce Uganda’s first oil once the required infrastructure is installed.

Cnooc was awarded a licence to recover petroleum in the area in September 2013. The field has estimated reserves of 800 million barrels, and will produce at least 40,000 barrels of oil per day at its peak production stage.

The revelation follows closely on the government’s announcement pushing back the date of first commercial oil production to 2022 from 2020.

The minister also revealed that the government has approved Tullow Oil Plc’s farm-down of its Uganda assets to Total E&P and Cnooc. The transaction is worth $900m and is subject to the payment of a capital gains tax of $167m.

The deal leaves Total E&P and Cnooc each with a 37.5% shareholding in Uganda’s downstream oil projects.

Tullow will remain in a non-operator position, retaining an 11.7% interest in the upstream and pipeline projects. This will reduce to a 10% interest in only the upstream project when the government acquires equity in the pipeline after Tullow recovers its costs on the project.

Uganda had delayed to approve the farm down after Tullow resisted paying the capital gains tax.

Related: Total, Cnooc reach deal on Tullow’s oil fields