Proscovia Nabbanja, the chief executive officer of Uganda National Oil Company. The government is still monitoring the pricing strategies of private dealers to ensure the reductions in importation costs are reflected at the retail level. PHOTO/COURTESY
What have you achieved at the Uganda National Oil Company?
In the past 10 years, Uganda National Oil Company (UNOC) has been at the forefront of key projects that are transforming Uganda's oil and gas sector. These include the Kingfisher project, which has a capacity of 40,000 barrels per day, and the Tilenga project, with a production capacity of 190,000 barrels per day. In both projects, UNOC holds a 15 per cent stake on behalf of the government.
UNOC entered into Joint Operating Agreements related to the development of both projects.
UNOC has increased state participation in Uganda's oil and gas sector. In 2023, UNOC acquired its licence for the Kasuruban Exploration Block. This acquisition underscores UNOC's commitment to expanding Uganda's hydrocarbon resource base and contributing to the sustainability of the country's resources through reserves replacement. UNOC has conducted geological and geophysical studies, to de-risk the block and will be entering into a Joint Venture arrangement with a Partner to develop the asset.
UNOC is also part of the development of the East African Crude Oil Pipeline (EACOP), a 1,443-kilometre pipeline designed to transport Uganda’s crude oil from the Albertine Graben to the Tanzanian port of Tanga for export. UNOC holds 15 percent equity stake through its subsidiary, the National Pipeline Company (NPC).
UNOC, through its subsidiary, the Uganda Refinery Holding Company (URHC) participates in the development of the Refinery in Hoima with a capacity to process 60,000 barrels of crude oil per day.
The development of the refinery is a key strategic project for UNOC and the Country as it directly contributes to value addition and macroeconomic benefits such as import substitution, balance of payments, energy security, job-creation among others.
UNOC has made significant progress, successfully negotiating and entering into an Implementation Agreement with Alpha MBM and will soon commence early project activities.
The refinery will be crucial in the development of the Kabalega Petro-based industrial park. UNOC is developing the industrial park and putting up the necessary enabling infrastructure to attract investment.
The park is intended to host heavy, medium and light industries that have synergies with Refinery, Airport and the upstream oil and gas sector.
Another key milestone that UNOC realised last year is the implementation of the mandate to the sole importer of petroleum products destined for Uganda and supply the same to the registered OMCs in Uganda. UNOC started engaging in the business in 2020 importing minimal volumes of petroleum products. Since the change in policy and commencement of the sole importation, UNOC has so far delivered over 2 billion litres of petroleum products (diesel, petrol and jet A-1) to the Ugandan OMCs and managed to stabilise pump prices, removing market speculation.
What are the biggest challenges and how are you dealing with them?
The oil and gas industry faces major challenges—including price volatility, rapid technological change, the global energy transition, capital flight, and geopolitical pressures—and UNOC is no exception.
Developing Uganda’s oil and gas sector, which lacks established infrastructure, requires significant investment, with the sector currently injecting $15–$20 billion into infrastructure development. UNOC alone needs over $1 billion, with government support and strategic partnerships helping to manage financial risk.
The energy transition has led to criticism of oil and gas projects, but UNOC remains committed to a balanced and just transition. This includes improving efficiency, investing in greener alternatives and nature-based climate solutions, and complying with the highest environmental and social standards.
Shifting global capital toward renewables has made oil and gas financing more restrictive, yet interest in funding remains strong due to the industry's critical role in energy security.
Is UNOC making or bringing money to the government?
The projects that UNOC is investing in have a maturing period of about three to five years. Whereas no revenues are seen yet from major projects such as Tilenga, Kingfisher and EACOP due to the current development phase, we anticipate the government to get in excess of $2 billion annually as direct revenues, including the revenues attributable to UNOC.
Last year, through the Ministry of Energy, you started importing fuel directly. What is the progress of this initiative?
In July 2024, UNOC received its inaugural shipment under this mandate. To date, we have landed over 24 Vessels including diesel, petrol and jet A-1. Since the inception of the business, UNOC has imported over 2 billion litres of petroleum products. We are now focusing on improving efficiency and value delivery to the Oil Marketing Companies (OMCs). We continue to prioritise investments in storage infrastructure, including improving the facility upgrades at Jinja Storage Terminal and fast-tracking the development of the Kampala storage terminal. We are also exploring synergies with Mahathi Infra Limited facilities.
We are engaging with the government of Kenya to optimise the scheduling of vessels, ensuring a consistent supply and preventing any potential stockouts or shortages in the country. We are also engaging the government of Tanzania to secure an additional effective importation corridor for petroleum products.
How has it reduced the fuel price?
UNOC’s sole importation of petroleum products has significantly reduced fuel prices in Uganda by about Shs1,000 per litre. By cutting out intermediaries and streamlining the supply chain, UNOC offers petroleum products to Oil Marketing Companies (OMCs) at more competitive rates.
A partnership with Vitol Bahrain EC enables bulk procurement at lower costs, ensuring a stable and efficient supply. UNOC’s direct oversight has also improved transparency and reduced supply disruptions and speculative pricing.
This new model has intensified competition among retailers, pushing them to offer better prices to attract customers.
The government is still monitoring the pricing strategies of private dealers to ensure that the reductions in importation costs are reflected at the retail level.
What hiccups have you experienced in importing fuel directly?
The have been some logistical bottlenecks, including limited pipeline capacity of multi-user facilities and scheduling conflicts, hindering the more efficient transportation of fuel to Uganda.
Importation through Dar es Salaam port in Tanzania presents logistical challenges due to the need for infrastructure enhancements, such as storage facilities and transportation networks to handle increased fuel volumes. Whereas this increases the landed cost in Uganda, we are working with key stakeholders to evaluate a multimodel (rail-water) transportation approach to improve the cost as we define a longer time solution of a pipeline.
Despite UNOC's direct importation efforts, the anticipated significant drop in pump prices has been gradual. Factors such as global oil price fluctuations, operational costs of OMCs and existing supply contracts have influenced the pace at which price reductions are reflected at the consumer level.
Some OMCs have been slow to adjust their pricing structures in line with UNOC's reduced wholesale prices, delaying the pass-through of cost savings to consumers.
