Firms scramble to cash in on oil cash
Speaking. The executive director of Petroleum Authority of Uganda, Mr Ernest Rubondo, speaks to journalists during the launch of the registration on the National Suppliers Database 2019 for the oil and gas sector in Kampala, yesterday.
PHOTO BY RACHEL MABALA
What you need to know:
- Dominating. Majority of these are Chinese, British, French, Saudi, Nigerian and Kenya firms, according to details in the National Supplier Database (NSD) as the service providers’ roster is formally called.
- Mr Emmanuel Mugarura, the chairperson of the Association of Oil and Gas Suppliers, said the development of a central database has made it easy to scrutinise and prequalify service providers.
Kampala. The number of local international service providers scrambling to cash in on the expected Uganda oil windfall has within a year increased by between three to five-fold, the sector regulator announced yesterday.
Some 716 foreign companies, up from 135 last year, have registered with the government to provide big-ticket engineering works, logistics, haulage and other specialist services.
Majority of these are Chinese, British, French, Saudi, Nigerian and Kenya firms, according to details in the National Supplier Database (NSD) as the service providers’ roster is formally called.
There are 996 Ugandan-owned companies this year prospecting to provide oil-related services, the government said, compared to only 378 the year before.
The sectors ring-fenced for Ugandan entities, otherwise christened as ‘local content’, include logistics, clearing and forwarding, supply chain management, catering, light air transportation, security and camp management.
Officials project 150,000 jobs at peak oil production, but about 30,000 at start of production expected in 2022.
There were no available figures on contracts numbers or the net value in a nascent sector in which investment over five years from 2019/2020 is expected to gross $20b (Shs74t).
“We plan to develop the National Supplier Database into a centralised joint qualification and an e-market place where approvals of procurement documents may be made,” Mr Ernest Rubondo, the Petroleum Authority of Uganda (PAU) executive director, said.
Ugandan companies should “compete aggressively”, he said, to stand a chance to win tenders in a standard and capital-driven industry ruled by cut-throat contest.
Verification
Whereas the government will verify the particulars of international companies through foreign diplomatic representations in Kampala, local companies’ verification is done through Uganda Registration Services Bureau, National Social Security Fund (NSSF) and Uganda Revenue Authority.
Speaking yesterday at the launch of the 2019 NSD registration that starts tomorrow, Mr Rubondo noted the review of technical designs for Tilenga and Kingfisher oil projects is in advanced stages. The review of East African Crude Oil Pipeline (EACOP) from Hoima to Tanga in Tanzania is nearing completion to pave way for Final Investment Decision (FID).
Currently five oil companies, France’s Total E&P, Anglo-Irish Tullow Oil and China’s Cnooc—and new comers Autralia’s Armour Energy and Nigeria’s Oranto Petroleum, are licensed to operate in Uganda.
Total E&P operates the Tilenga project in Nwoya district and it is estimated that requisite infrastructure to pump out the oil there will cost Shs14t ($4b).
On the other hand, Cnooc, which operates Kingfisher field, formerly in Hoima district, will require Shs7t ($2b) worth of infrastructure investment.
The cost
The oil pipeline and refinery will cost Shs13.2t ($3.6b) and Shs11t or $3b, respectively.
Mr Emmanuel Mugarura, the chairperson of the Association of Oil and Gas Suppliers, said the development of a central database has made it easy to scrutinise and prequalify service providers.
