By URN
The cumulative investments in the oil and gas sector stood at over 7.5 billion dollars by the end on 2023 says the Petroleum Authority of Uganda.
Peninah Aheebwa , the Director Economic and National Content Monitoring at the Petroleum Authority Uganda (PAU) reveals that as 2024 comes to an end, the companies have spent or are spending 2.9 billion dollars.
“We still expect an expenditure of around 2.3 billion dollars. Again, we expect significant expenditure during operation,” says Ahebwa as she accounted to Ugandan how the industry has progressed since February 2022 when the oil companies made the Final Investment Decision for the Tilenga, EACOP and Kingfisher projects.
She reveals that the Authority expects up 15 billion dollars in capital expenditure on the projects during the development and production stages of the sector.
The projects in the Upstream
Tilenga Project has nine fields with an estimated capital expenditures of $4-5 billion, while the Kingfisher Development under CNOOC Uganda Limited with three fields with an estimated an estimated CAPEX of $3-5 billion.
The ECAOP project is expected to sink in about $5 billion, while the refinery will be constructed at about $4 billion. There over one thousand contractors and subcontractors linked to the Tilenga, Kingfisher and the EACOP projects since FID in 2022.
The Petroleum Authority of Uganda is partly charged monitoring the expenditures ad costs being incurred by the oil companies because they will be recovered when production of oil begins. PAU regulates the upstream and the midstream aspects of the sector.
It mainly deals with the oil and gas resources management, ensures that all operations are cost efficient. It is also in charge of the petroleum data, it is also in charge of health, safety, security, socials and the environment aspects of the sector and linking the oi and gas sector with other sectors of the economy.
Procurement since FID
Aheebwa Ahebwa revealed that around five thousand two hundred and eighty procurements have been undertaken by the licensees since FID. “And these were worth 5.3 billion dollars. Out of these, four thousand five hundred and eleven procurements went to Ugandan companies worth 2.1 billion dollars. And that is aroid 40% in contract value,” she said.
A key message from the development so far is that Ugandan companies should consider entering joint ventures partnership local or with international companies if they are to take up contracts or subcontracts in the sector. Some of these opportunities are coming up under the Uganda National Oil Company (UNOC) which has an active license in the Kasuruban exploration area. The government is also planning another licensing round for other blocks within the Albertine graben. Joint Ventures in Oil and gas
Aheebwa expressed hope that with joint ventures, probably knowledge and technology will be transferred to Ugandans Ugandan Companies.
“So to date, we have approved around 64 joint ventures. And 35 of these have been able to secure work in the sector with a value of around three hundred million dollars,” Ahebwa revealed.
Some Ugandans companies have joined Joint Ventures with Nigerian companies that are venturing into exploration.
“We need to do little bit more because I know that that Nigerian companies are going into exploration. And a good number of them are operators and they are managing marginal fields. So I think we need to embrace joint ventures. Offering services is good but we also need to go into exploration,” suggests Ahebwa.
Opportunities in the exploration area are mainly for those that may wish to join the companies who were awarded exploration licenses. New entrants can farm in those licenses by taking up shares. Even when the government has not announced the next round competitive of bidding of blocks, which does not mean that companies holing licenses are prevented from negotiating within in the sector or to farm-in/farm-out.
Aheebwa said as part of technology transfer, PAU has been encouraging the licensees to equip some of the country’s oil and gas training institutions. “And so some of the licensee have supported the universities with software and hardware to a tune of over two hundred thousand dollars”
Oil and gas jobs
According to Ahebwa, 90% of 15000 that are directly employed in the upstream segment of the sector are Ugandans.
According the PAU, 64% of those being employed are in managerial positions, 85% of the technical jobs are occupied by Ugandans, and the others are 99% in terms of occupancy.
“Out of those direct jobs, in our computations we know every direct job produces around 2.3 times indirect jobs and around three times induced jobs. So out of the1500 jobs that have been created, we think the industry has also created 34000 indirect jobs.” said Ahebwa.
PAU further estimates that over one hundred thousand induced jobs have so far been created by the industry. It is anticipated that the indirect and induced jobs are occupied by Ugandans.
In preparation for the operations phase, Ahebwa revealed that the oil and gas companies are undertaking what she describes as “massive” open inline courses or training.
“As we speak there is aggressive training of two hundred Ugandans that will be participating in the operations phase. I know you have heard of the Tilenga Academy and the EACOP Academy in Uganda and Tanzania“
