- US dollars 10bn to be invested
- 60,000 direct and indirect jobs to be created 57% of which will go to Ugandans
- Uganda’s automotive industry to benefit through car parts manufacturing
By Our Senior Reports
Uganda’s joint venture partners led by Total Energies have announced the Final Investment Decision (FID)-registering a major international milestone for the country’s oil and gas projects. The historic pronouncement was made at a colourful ceremony presided over by President Yoweri Museveni at the Kololo Independence grounds. He was joined by visiting Dr. Philip Isdor Mpango and HE Jessica Alupo -the Vice Presidents of Tanzania and Uganda , respectively.
This milestone marks a firm commitment from the oil companies to proceed with Uganda’s oil and gas projects and launches the major construction for works by the joint venture partners who include ; CNOOC Uganda Limited, Total Energieis EP Uganda and the government of Uganda through the Uganda National Oil Company (UNOC). This means that Uganda is now destined to produce commercial oil by 2025 .
President Museveni while giving a detailed background about Uganda’s journey to oil discovery and production said he was happy about the pipeline going through Tanzania in honour of the late President Mwalimu Julius Nyerere’s contribution to the liberation of Africa from colonial rule .
President Museveni said the East Africa Crude Oil pipeline will be a nucleus for expanded oil production in the EAC region .
The CEO of Total Energies Patrick Pouyanné said that the joint venture partners have mobilized US Dollars 10bn that they are going to commit to the development of the oil facilities that will ensure the realization of -first oil by 2025.
What the FID means for Uganda
Minister of Energy and Mineral Development , Hon. Ruth Nankabirwa explained that the FID in the oil industry will positively impact the economy by creating jobs especially for the youth through direct, indirect and induced employment. At least 160,000 jobs are expected to be created, provision of goods and services to the industry; expansion of Uganda’s tax base and contribution towards repayment of Uganda’s debt obligations.
Nankabirwa further stated that the FID will facilitated the implementation of the National Development Plan III (NDP III) which focuses on Petroleum and mineral development for industrialization.
“It is worth noting that these achievements have been made possible through the steadfast leadership and commitment of His Excellency, Yoweri Kaguta Tibahurwa Museveni and her Excellency Samia Suluhu Hassan who is today represented by His Excellency the Vice President Dr. Philip Isdor Mpango and of course the late President Dr. John Pombe Magufuli (RIP),” Nakabirwa stated .
The minister expressed government’s commitment to ensure local content participation- with a view to achieve optimal participation of Ugandans and Ugandan enterprises with a focus on employment, provision of goods and services, capacity building, enterprise development, and transfer of knowledge and technology.
“The Ministry of Energy and Mineral Development and relevant entities of government are committed to ensuring that the framework, put in place by the passing of Local Content Policy in 2018 and enactment of the various laws and national content regulations within the Petroleum Laws are implemented,” she added.
Some of the services provided by Ugandan companies include Human Resource services; construction; agricultural and crop development; environmental and waste management services; broadcasting services; housing, hotel accommodation and office rental services; security services; ICT accessories and services; education management services; insurance; vehicle hire, tracking and maintenance; medical services and equipment; and legal services.
The Permanent Secretary at the Ministry of Energy Eng. Irene Pauline Bateebe called for effective collaboration among MDAs, the local communities, cultural and religious leaders “whose interests should be aligned as much as possible if we are to manage the sector in a special way.”
Bateebe said that the Ministry of Energy will continue to support the oil companies, properly supervise the sector and ensuring proper coordination to accelerate project execution.
Uganda discovered commercial quantities of oil in 2006 and this was followed by the issuance of nine petroleum production licenses to the Oil Companies (IOCs) in 2012 and 2016. The oil resources discovered so far stand at 6.5 billion barrels Stock Tank Oil Initially in Place (STOIIP) with about 1.4 billion barrels recoverable.
In 2014 the Government and the oil companies entered into a Memorandum of Understanding (MOU) for the commercialisation of petroleum. The commercialisation plan considers the development of the crude oil export pipeline and oil refinery. Development of the two projects is progressing.
The East African Crude Oil Pipeline is a 1,445-kilometer-long pipeline from the oil wells in western Uganda in Hoima district to Tanzania’s seaport of Tanga.
The pipeline will cover 296km in Uganda passing through Hoima, Kyankwanzi, Mubende, Gomba, Kyotera, Lwengo, Ssembabule, Rakai, and Kikuube and 1443km in Tanzania through the regions of Kagera, Gieta, Shinyanga, Tabora, Singida, Dodoma, Manyara, and Tanga.
The $3.5 billion oil pipeline project is the longest electrically heated pipeline in the world and it is heated because Uganda’s oil is waxy.
Uganda has about 1.7 billion barrels of recoverable oil discovered in the Albertine Graben on the border between Uganda and DR Congo at the Kingfisher and Tilenga fields.
How Uganda’s nascent Automotive Industry championed by Uganda’s flagship Kiira Motors will benefit
Uganda’s automotive industry captain -Kiira Motors Corporation (KMC) whose Vehicle Plant at the Jinja Industrial And Business Park is set to be completed in the next three months is set to be one of the major beneficiaries of Uganda Oil and gas sector .
This is because after crude oil is removed from the ground, it is sent to a refinery where different parts of the crude oil are separated into useable petroleum products. These petroleum products include plastics, distillates such as diesel fuel and heating oil all by-products that can be used in the building and powering of vehicles made in Uganda.
Kiira Motors Corporation led by Prof. Sandy Stevens Tickodri -the Executive Chairman and Mr. Paul Isaac Musasizi- the CEO are set to produce at least 22 vehicles a day and 5,000 units a year – at their start-up facility in Jinja .
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