How Ugandan businesses are profiting from oil sector
An oil rig in a well pad in Kingfisher Development area in Kikuube District. As Uganda prepares to become an oil producing nation, investments continue to reshape key developments in the Bunyoro Sub-region. PHOTO/ALEX ASHABA
What you need to know:
- A total of 5,280 contracts were awarded, with a combined value of more than $5.2b, according to PAU.
As Uganda prepares to become an oil-producing nation by 2026, investments continue to reshape key development areas, including the Kingfisher project in Kikuube District, the Tilenga project in Buliisa District, and the East African Crude Oil Pipeline (EACOP) in Hoima District.
According to the Petroleum Authority of Uganda (PAU), the sector currently employs 14,910 individuals, comprising 1,521 expatriates, 13,389 Ugandans, and 5,152 community-based workers. Ugandans make up 91 percent of the workforce, showing efforts to prioritise local employment.
Ms Gloria Sebikari, the manager of corporate affairs at PAU, said Ugandan companies have also benefited from the industry.
“Contracts for Ugandan companies since the Final Investment Decision (FID), Ugandan entities have made significant progress in securing contracts for the supply of goods and services in the oil and gas sector. Contracts awarded to Ugandan companies are expected to peak this year, reaching approximately $250 million,” Ms Sebikari said.
However, as the sector transitions from the construction phase to operation, the value of contracts and employment opportunities is expected to decline, marking a significant shift in Uganda’s oil and gas trajectory.
She said from 2017 to June 2024, a total of 5,280 contracts were awarded, with a combined value of more than $5.2b. Of these, 4,511 contracts worth more than $2.1b were awarded to Ugandan companies.
She added that other contracts, worth more than $283.5m, were won by Ugandans through joint ventures between Ugandan and foreign companies.
For EACOP, where Uganda is expected to commercialise its oil, the construction phase is underway. The project currently employs 157 staff of which 14 are expatriates. However, the workforce is expected to reach 3,000 personnel, according to PAU.
Most of the workers on the EACOP project will be accommodated in five camps across Uganda. These include Kabaale in Hoima which will host up to 300 personnel, Kakumiro camp will accommodate 400, while the Mubende camp will house 433 workers. In Sembabule, the camp will host 478 people, and the Kyotera camp will provide accommodation for 300 personnel.
Mr Derick Johnathan Mbabazi, the national content manager of CCJV for Engineering Procurement Construction (EPC) III Project, said CNOOC Uganda Limited contracted them to undertake the construction of the Central Processing Facility (CPF) and support facilities in the Kingfisher development area.
He said the project has been achieved through sub-contracting other Ugandan companies such as Rohi Investments Limited.
“Most of the people who are Ugandans that were recruited in 2022 started as casual workers but now they are promoted to become banksmen, riggers among others, we have done many capacity building to see that we have many suppliers benefiting from this project,” Mr Mbabazi said.
He said some Ugandan companies were given contracts to supply food, sand, hardcore, security, accommodation services, and catering among others.
The Ugandan companies involved in oil project at Tilenga project include Airswift Consulting Uganda SMC Ltd, which is doing wellpads and network project engineering services; Threeways Shipping Services (Group) Ltd which is undertaking intrafield cargo transportation and handling and lifting services; and Mantrac Uganda Limited which is undertaking supply and installation of prime rated diesel engine generators.
At Kingfisher development area, Excel Uganda Ltd is undertaking PC-1 well pad site preparation and civil works for well pads 1,2 and 3 and infield access roads construction; Excel Construction Ltd is doing procurement and construction of a drilling contractor buffer yard; Kato Construction is constructing the truck buffer yard; Green Label Services Limited is doing transportation, treatment and disposal of wastewater in well pad-2; and Rina One Investments Ltd is doing restoration of damaged and collapsing perimeter fence in Kisinja camp and yard.
Other companies include Teclab Uganda Limited, Prome Consult Uganda Limited, Soliton Telmec, Dynaco Limited, Fabrication Systems Uganda Ltd, GCC Services (U) Ltd, and Blue Crane Communications.
