By Nicholas Bariyo
KAMPALA Uganda--China's largest offshore oil producer, Cnooc
Ltd. (0883.HK), said Friday that the development of its $2 billion
Kingfisher oil field in Uganda remains on course despite tumbling
global crude prices.
A company spokeswoman told The Wall Street Journal that on-site
activity, including test drilling and construction of access routes
to the 635-million-barrel oil field, are progressing well.
"CNOOC Uganda, as the operator of Kingfisher, will cooperate
with its partners and other stakeholders closely to proceed with
the development of the field," the spokeswoman said.
Cnooc co-owns the oil field with the U.K.'s Tullow Oil PLC
(TLW.LN) and France's Total SA (TOT).
The oil field is expected to produce up to 40,000 barrels a day
of crude when it comes on stream in 2018.
Ugandan officials have raised concerns recently that the
continued slide in global crude prices may affect the planned
development of the country's newly found oil fields, estimated to
contain 6.5 billion barrels of crude and 500 billion cubic feet of
natural gas.
Global oil prices dropped to five-year lows this week because of
concerns about a glut in supplies, caused mainly by increased
production in the U.S., the world's largest consumer.
Tumbling prices have raised concerns that some projects in East
Africa may be put on hold. The region accounted for about 25% of
new oil and gas discoveries worldwide over the past four years,
according to analysts.
Sources at Uganda's state oil body, the Petroleum Exploration
and Production Department, say the development of Uganda's crude
projects may become unviable if the global prices slide below $50 a
barrel. The country's crude is waxy and will require a heated
pipeline to transport it to the East African coast for export.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires