Airline companies miss out on lucrative oil deals

Kampala

As Uganda moves to the production phase of petroleum deposits in the Albertine Grabben concerns are rising on whether a clear stake for local companies, a key factor to ensure future sustainability real domestic harvest from the oil resources, has been catered for in agreements between government and the oil companies. But early experience at exploration phase and the initial production phases paints a gloomy picture.

At the centre is the main firm in the exploration and early production phase, Tullow Oil Uganda which faces accusations of deliberately edging purely local companies. The company denies the accusation, saying it is a reputable international player whose bottom line for consideration on whom to contract is purely merit and performance at the highest standards.

“We can’t have one set of rules for local companies and another for international companies,” said Tullow Public Relations Officer Jimmy Kiberu. “We want to ensure adequate local participation but the overriding concern is health and safety for our staff.” He said this in specific reference to procurements of air transport services where some local companies claim they had been deliberately edged out.

“In the aviation sector we have found ourselves disadvantaged because I believe that these guys have taken advantage of lack of a clear policy (to support local companies),” says Capt. Tony Rubombora, the executive director of Eagle Air.

“No opportunity to participate in air logistics,” he says. His airline has been in operation for nearly two decades and believes it has built the necessary professional reputation and accumulated sufficient knowledge of the industry to compete with the best.

When Tullow advertised initially, they were ruled out because they were apparently overqualified with bigger aircraft that was deemed unsuitable but when a second opportunity came where they believe they qualified they still did not win because they apparently lacked OGP experience (Oil and Gas Production).

Mr Kiberu told Saturday Monitor OGP was a mandatory requirement.
But airline industry players say in a country and indeed a region where everyone is learning on the oil exploration and exploitation job, other considerations should have been given if only for the purpose of building domestic capacity.

While a local firm can partner with an OGP compliant international company, local firms expressed concern that the bigger airlines come with a Big Brother mentality wanting to be the front runners and therefore would end up appropriating much of the profit living the country with too little or nothing.

A tender debrief for one of the local companies Saturday Monitor has seen, while the airliner scored, acceptable in one parameter, above average in another, average in three others and only unsatisfactory in ownership of hangar (garage for planes), an item Eagle Air says was not necessary since they use facilities at the Entebbe International Airport, they were still not considered. A fact that has rubbed them the wrong way.

Tullow asked us for detailed questions related to this matter but by press time, they had not answered us. For local companies two purely local and two locally registered by foreign owned responded to the adverts, only one had a close chance out of a total of six that were prequalified and 13 that responded to the advertisement.

The National Oil and Gas policy requires that local firms are given priority in the provision of services to the oil and gas exploration exercise. However, our investigations reveal that some foreigners have formed a chain of firms that are ‘winning’ to provide even the most basic services that ideally can be handled by Ugandans. These services include provision of parking yards, warehousing, catering and supply of equipment among others.

These are being provided by three different firms, ironically owned by the same foreign directors. In the airline industry, sources say foreign investors had rushed to register companies to out compete the local initiatives.