Kampala. Ugandans must use the delay in making the Final Investment Decision (FID) to prepare for commercial production of oil.
The pronouncement - FID – will open Uganda to possible investments of $20b in the oil and gas sector.
Speaking ahead of the Uganda Chamber of Mines and Petroleum (UCMP) fifth annual oil and gas convention, Mr Elly Karuhanga, the UCMP chairman, said that whereas many people have been wondering when the FID will be announced, the delay was a blessing in disguise, which players must use to prepare for the journey ahead.
“The oil and gas industry is like taking a flight. Before a plane takes off, so much preparation goes on. Cleaning, loading luggage, fuelling, cockpit and cabin checks. Once it starts taking off, if one is not on board, then it will be too late for them,” he said.
However, Mr Karuhanga said there was need for government to announce when it expects to take a position on the matter.
Open up $20b investment
The announcement will open the gate way to more than $20b of investments both in the oil and gas sector and related infrastructure.
The delay, Mr Karuhanga said, should be an opportunity to organise, skill up, put systems in place, upgrade standards, and create meaningful mergers to raise the required capital and technical ability.
“It is hoped that 2019 will be the time for the big decisions leading up to production of oil. Government and the joint venture partners have indicated that they hope to conclude all agreements and announce FID not later than August,” he said.
Mr Peter Muliisa, the Uganda National Oil Company Limited chief legal and corporate affairs officer, said by close of the year or thereabout, announcement on FID will be officially made, given that consensus has been reached.
Earlier the government had indicated that the final investment decision for the refinery will be taken by September of this year.
In the next two–five years, Uganda will invest in the development of over 15 fields ($8-9b), construction of the refinery ($4-5b) and the construction of supporting infrastructure, among others.