By Business Insider Reporter
Uganda has reached one of the most consequential milestones in its two-decade pursuit of commercial oil production, completing the minimum drilling required at the Albertine Graben ahead of first oil expected in the second half of 2026.
The announcement – made by the Uganda National Oil Company (UNOC) – marks a pivotal turn not just for Uganda’s energy future, but for East Africa’s wider regional integration, logistics, and industrial ambitions.
UNOC confirmed that 156 wells across the Tilenga and Kingfisher projects have now been drilled, meeting the threshold for commercial extraction. The fields, jointly owned by TotalEnergies, China’s CNOOC, and UNOC, will eventually comprise 457 wells over their full lifecycle, with production expected to peak at 230,000 barrels per day.
Uganda also approved the configuration for its planned US$4 billion refinery near Hoima, which will be constructed as a Residual Fluid Catalytic Cracker facility – an upgrade that positions the country to produce a wider range of refined products for domestic and regional markets.
The revised reserve estimate – up 18 percent to 1.65 billion recoverable barrels – boosts long-term confidence in Uganda’s upstream potential.
A transformational moment for Uganda’s economy
For Uganda, the completion of the drilling phase signals the beginning of a long-awaited revenue era. Oil income is expected to shift the structure of its economy, reducing dependence on agriculture and external financing.
The government has projected that at peak production, oil could contribute billions annually in revenue, support local content development, and accelerate infrastructure investment from pipelines to industrial parks.
The refinery in particular is expected to anchor a new downstream industry, supplying petroleum products to Uganda, Rwanda, Burundi, western Kenya, northern Tanzania, South Sudan, and eastern DRC—reducing the region’s reliance on imported refined fuels.
Energy security, competitiveness across East Africa
Uganda’s move comes at a moment when energy demand across East Africa is surging. Manufacturing, transport, logistics and agribusiness sectors are grappling with high fuel prices and limited refining capacity. Uganda’s refinery could meaningfully address this gap.
If completed on schedule, the refinery would become only the second major functional refining facility in the region after Kenya’s stalled Mombasa refinery, and would provide:
- More stable regional fuel supplies, reducing import vulnerability and forex pressure
- Lower transport costs for inland markets, especially Rwanda, Burundi and eastern DRC
- A competitive boost to East African industries, which rely heavily on diesel for logistics and power generation
With a domestic supply of refined products, Uganda also positions itself as an energy hub in East Africa.
The EAC’s biggest cross-border energy project takes shape
Uganda’s upstream progress intersects closely with the East African Crude Oil Pipeline (EACOP), the US$5 billion infrastructure project that will transport crude from Hoima to the Tanzanian port of Tanga. The pipeline – co-owned by TotalEnergies, UNOC, and Tanzania Petroleum Development Corporation (TPDC) – will be the backbone of regional oil logistics once operational.
The completion of the drilling phase strengthens the economic case for EACOP, sending a strong signal to financiers and regional policymakers that first oil is within reach.
For Tanzania, the pipeline promises transit fees, port activity, and the development of a new oil services corridor from Tanga to the Lake Zone.
For East Africa, the pipeline and upcoming refinery represent the region’s most ambitious attempt yet to create a coordinated energy market capable of supporting manufacturing expansion, regional trade, and strategic reserves.
Regional stability and investment confidence
This milestone arrives at a time when many African oil projects face headwinds from climate activism, restrictive financing, and high capital costs.
Uganda’s progress – backed by French, Chinese, and Ugandan investment – signals that East Africa can still attract large-scale energy capital if political and regulatory environments remain predictable.
It also sets the stage for secondary investment across transport, power generation, petrochemicals, and export logistics – sectors already drawing interest from banks and industrial players.
Balancing growth with environmental scrutiny
Uganda’s oil journey has not been without controversy. Environmental groups continue to raise concerns about drilling in ecologically sensitive areas near Lake Albert, displacement of communities, and the climate implications of EACOP.
As Uganda moves closer to production, scrutiny is expected to intensify from global activist networks and international financing bodies.
To maintain public trust and investor confidence, oversight on resettlement, biodiversity protection, and emissions mitigation will be crucial.
A defining chapter for EA economic future
The completion of the drilling phase is more than a technical achievement – it marks a strategic shift in East Africa’s energy and industrial landscape.
For Uganda, it unlocks a long-awaited economic windfall. For the region, it promises increased energy security, stronger integration, and new industrial opportunities in a fast-growing market of nearly 300 million people. As Uganda turns toward production, the next 18 months will be decisive: from finalising the refinery’s financing to advancing EACOP and preparing local industries for a new oil-driven era. The stakes are high, but so is the potential to reshape East Africa’s economic trajectory for decades to come.
