Uganda to Amend its Petroleum Policy; Seeks JV Partner for Oil, Gas Project
By Ndubuisi Micheal Obineme
Uganda is working on amending its petroleum policy to ensure that the upstream – exploration, development, and production are well regulated and the midstream – petroleum refining are also well regulated.
Engr. Irene Pauline Bateebe, Permanent Secretary of Uganda Ministry of Energy & Mineral Development disclosed this at the 6th edition of Uganda International Oil and Gas Summit (UIOGS) 2021.
In her speech, she stated that the Uganda oil and gas sector is underpinned by the National Oil and Gas Policy of 2008 which is 10 years old.
“But, we are working on amending it to address issues around the global energy transition and other emerging issues in the country’s oil and gas sector.
“We do have an existing downstream policy under the Petroleum Supply Act, 2003. We have laws that ensure the efficient management of oil and gas revenues.
“There is Public Finance Management Act 2015 that handles petroleum revenue management. We have regulations that address specific segments such as the Health, Safety & Environment (HSE), National Content, Metering among others.
“As the development continues, we recognize the need to put in place additional laws that will facilitate project development.
“Specifically, we are working on enabling the legislation for the EACOP Bill 2021 with the amendment on Income Tax Act Bill 2021, and Public Finance Management Act Bill 2021.
“We will be providing the right environment for the legal and regulatory framework to advance the project,” she added.
She also said that the Uganda Ministry of Energy and Mineral Development provides policy, licensing, regulation, commercial frameworks to ensure projects are promoted efficiently.
According to her, under the National Oil and Gas Policy, the Government of Uganda established the Uganda National Oil Company (UNOC) which is focused on the commercial and business aspect of the oil and gas industry.
She said, “Another entity that was established is the Petroleum Authority of Uganda (PAU) who is responsible to regulate the country’s oil and gas sector.
Speaking on the Joint Venture partnership, Mr. Gilbert Kamuntu
Chief Commercial Officer of Uganda National Oil Company (UNOC) stated that the Joint Venture Partnership Opportunities in Uganda requires the involvement of government institutions such as the Ministry of Energy and Mineral Development, The Ministry of Finance, Petroleum Authority of Uganda, and Uganda National Oil Company (UNOC), etc…
Kamuntu said that The Ministry of Finance plays a key role to design the fiscal regime which encourages national content and JV partnership. While Petroleum Authority of Uganda handles the regulation aspect, as the commercial aspect is managed by UNOC.
“In all of this, UNOC plays a key role as the business arm of government. UNOC’s main mandate in the Petroleum Act (2013) includes; managing the State’s commercial interests in the petroleum sub-sector; Developing in-depth expertise in the oil and gas sector.
“Joint Venture (JV) partnership is part of what UNOC does. We have established a strong footprint across the entire petroleum value chain.
“We are a JV partner with TotalEnergies, CNOOC, with 15% participating interest. We also have a 15% interest in the EACOP project.
“We have a 40% interest in the Uganda Refinery. We have various interests across other areas of business such as Trading – bulk importation of petroleum products, Kabaale Industrial Park, and Terminal Facilities.
“We intend to go into JV partnership for the Kampala Storage Terminal.
“At UNOC, we believe JVs is important and a good strategy for the development of our projects.
“UNOC also have the responsibility of new exploration ventures. It promotes the development and implementation of National Content.
“UNOC unbundles contracts of UNOC in UNOC-Led projects to enable participation of Ugandan businesses.
“UNOC is involved in the development and implementation of Procurement and Contracting Procedures for the benefit of Uganda Firms.
“UNOC is also involved in Executing Agreements that offers skills transfer, technical know-how, and technology from JV partners and their sub-contractors to Ugandan firm through JV Agreements.
“UNOC is building capacity and skills for community-based contractors and SMEs to provide services and materials for the industry. It also supports training and capacity building for Ugandans in Oil and Gas,” he added.
In her words, Ms. Jessica Kyeyune, National Content Specialist of Uganda National Oil Company (UNOC), said that UNOC will be entering new exploration ventures to get some blocks.
“We are also doing business in storage terminal where we are looking for Joint Venture partnership.
“We are also involved in downstream bulk trading and UNOC has an operator interest of 100%”.
Jessica stressed that UNOC has developed a National Content Strategy with Six Pillars which comprises the Recruitment of Ugandans; Supplier Capacity Development; National Skills Development; Supplier Selection; Operation Services Capacity; Operatorship Capacity.
She explained that UNOC is focused on recruiting Ugandans which has enabled the company to employ Ugandans living in the Diaspora who are working in other countries in the Middle East, United States, UK, and Asia.
She confirmed that some of the Ugandans living in the Diaspora have returned to the country to support the development of UNOC.
“Presently, we are 100% Ugandans. But, we will get more expatriates for gender diversity and inclusion.
“We have a target of employing 70% Ugandans and 30% internationals. We need the internationals as Uganda is a nascent oil and gas country and we do not have enough professionals.
“For the second pillar on Supplier Capacity Development, this is where we are facilitating growth and capacity building on core financial and HSE development of national providers.
“We will carry out some supplier development workshops. We are planning to take some of our suppliers to Nigeria to gain more experience and understand the supplier’s business activities.
“We have also entered MOUs with Stanbic Bank to support suppliers and UNOC is a major player in that aspect.
“We are entering into various partnerships so that when the need arises for training, UNOC will get into that training space.
“We are also working on national skills development and this is where we are developing the skills of Ugandans. We do formal training in oil and gas, as we attend conferences and other event activities.
“We are going to place our staffs to work with IOCs operating in Uganda and other players such as EPC contractors.
“We are benchmarking our operation internationally to gain the necessary skills.
“For Procurement, we give preference to Uganda companies. We are also working on making sure our suppliers aren’t just focusing on the Uganda market but they can be able to supply internationally”.
Speaking about the Operatorship Capacity, she said UNOC will get some exploration licenses, once they have been able to the allocation of the blocks, UNOC will look for Joint Venture partners.
