Uganda’s oil: Do not work in silos

We are having this interview as African leaders and energy sector players are gathered in Cape Town, South Africa at the African Energy Week to discuss more ways of defeating energy poverty by 2030. Is it mere sloganeering?  
Not really. I am encouraged by the words of leaders at the annual African Energy Week happening in Cape Town, South Africa (October 16 – 20). They all speak with the commitment to invest in the energy sector to beat energy poverty. President Museveni was clear in his speech delivered by Ruth Nankabirwa that through industrialisation Africa can fight poverty. Museveni also said, Uganda’s future potential is huge in the oil-gas sector since only 10 percent of the Albertine Graben is licensed for petroleum development and other potential basins are also under consideration. He said Uganda and Africa will continue working with global partners but this should be premised on mutual respect and partnership. I see opportunities for companies to expand and make money from the energy sector. 

You have been at the centre of Uganda’s oil and gas project for many years. How would you describe the status of the sector? 
We have made great strides towards seeing our first oil as a country come 2025. The government of Uganda and its partners and private sector players must be applauded for the commitment they have made over the years to invest billions of dollars in this sector that is creating thousands of jobs for Ugandans and related opportunities like the supply of goods and services. 

The exit of Tullow had created some ‘fear’ among sector pundits thinking that the project would stall, but we worked closely with the government and other sector players to ensure that we reached where we are . It is always important to have a target. Now, work in oil and gas sector is being done and all the bureaucracy was transferred from the government to private sector players. 

Could you underline those sector achievements for our readers?
We have the Chamber of Mines and Petroleum which has worked with the Ministry of Energy and Mineral Development for years to define the direction of the oil and gas sector. We continue to do this with other authorities like the Petroleum Authority of Uganda and other partners to cause notable impact in the sector. Data from PAU indicates that since the FID was reached last year, the number of direct jobs created in the sector has grown to over 12, 000 with local citizens taking more than 93 percent of these jobs. We expect this number to more than triple as we move towards 2025.

Indirectly, tens of thousands of Ugandans are going to be positively impacted. We have seen several joint ventures coming through, and the market for Ugandan goods has also been provided. Training of Ugandans in oil and gas and related fields has been noted. Key infrastructure projects like Kabalega International Airport are nearing completion, oil roads are completed, and the East African Crude Oil Pipeline project development is gaining momentum. Some oil wells at both Kingfisher and Tilenga have been drilled and more will be drilled as we get to 2025. 

You have been one of the strongest supporters of national content in the oil and gas sector. Are you happy with what has been achieved so far? 
In addition to the jobs, a lot has been achieved in the Kingfisher and Tilenga project areas in terms of national content. The latest official figures from the Petroleum Authority of Uganda indicate that about 73 percent of the companies, equivalent to 460 out of 624 involved in supplying the sector have been Ugandan. More than $988,650 (Shs3.7 billion) has been channeled to the community economy in exchange for the goods and services. Investment after the FID will facilitate Uganda’s Gross Domestic Product (GDP) growth by 22 percent and unlock several opportunities. 

We expect investments of between US$15-20b to be made ahead of our first oil in 2025.  A significant amount of this money has been invested in developing the Kingfisher and Tilenga projects in the Albertine Graben and constructing the East African Crude Oil Pipeline (EACOP) among other projects. Currently, a team from PAU is in China seeing our pipes for the pipeline being loaded to get to Uganda to get our oil out of the ground. 

What areas have Ugandan companies failed to improve on to better reap from oil and gas?  
Ugandans are upbeat about the oil and gas sector. This resource is theirs which is why we have continued to encourage them to formalise, network, form partnerships, register in the National Suppliers Database and the National Oil and Gas Talent register, file their tax returns, ensure quality and quantity as stipulated in their contracts, and adhere to the ESG standards among other areas. 

Oil and gas remain one of the most expensive sectors to invest in because of the standards that are required. Do not work in silos, because Company A might have a skill that Company B does not have – which means joining hands to win contracts, make money and contribute to the sector’s growth and economy.  

Despite discovering high levels of the oil resource in the Albertine, and making significant investments thus far, there are sections of people especially environmental activists that are opposed to the oil project. Isn’t the country sliding back? 
For starters, the estimated oil resources in the country are 6.0 billion barrels of oil and approximately 1.4b barrels are recoverable. 
Those opposing the oil project are not our enemies, they are our friends because they check us to ensure that we observe the rules of the game.