The construction of the critical oil and gas infrastructure are almost complete with the facility expected to turn Uganda into a regional oil producing economy, Dr Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PS/ST) has said.
This comes at a time Uganda is gearing up to become a regional oil producing economy and works on the critical oil and gas infrastructure have progressed significantly.
Dr Ggoobi was on a three-day working field visit to the oil and gas operational areas that was coordinated by the Petroleum Authority of Uganda (PAU).
The three-day field visit commenced with a tour of the Uganda Petroleum Institute – Kigumba (UPIK) on April 8, 2022, the Tilenga Project in Buliisa and Nwoya districts on April 9, 2022, together with the Kingfisher Development Project in Kikuube district and the Kabaale Industrial Area on April 10, 2022.
Dr Ggoobi explained that the infrastructure gap which was one of the key challenges to commercialising Uganda’s oil and gas sector had been addressed by government and that the progress made in the sector developments following the signing of the Final Investment Decision (FID) by the Joint Venture Partners is impressing.
“We have constructed over 70% of the critical roads, works on phase one of Uganda’s second international airport in Hoima are expected to be completed by February 2023, and the Uganda Petroleum Institute at Kigumba is skilling Ugandan technicians to the required international standard for the oil industry,” said Dr Ggoobi.
Adding: “The deliberate efforts which have been undertaken by government in terms of capacity building, regulatory and institutional framework have convinced me that Uganda has already escaped the oil curse.”
Mr Ernest Rubondo, the Executive Director at the PAU, said the different projects visited impact on the other sectors of the economy differently creating positive contribution to the entire economy.
He added that the linkages will facilitate the growth of the economy in a manner that is beneficial to all Ugandans working in the different sectors.
“If these oil roads had not been constructed, movement of equipment needed in the oil sector would have been a challenge, but you should also recognise that these same roads are benefiting other sectors of the economy like agriculture, transport and tourism,” said Mr Rubondo while commenting on the oil and gas sector linkages.
Following the announcement of the FID by the Joint Venture Companies Total Energies, CNOOC Uganda, and UNOC, the oil and gas sector has seen a ramp up in activities with construction works and award of contracts for the three major projects of Tilenga, Kingfisher and East African Crude Oil Pipeline project (EACOP).
The PAU is currently spearheading two studies to define business opportunities in the agriculture and housing sectors linked to Uganda’s emerging oil and gas economy.
The study is expected to estimate the current and future demand and supply, assess the status of standards, as well as document the active agricultural enterprises with potential to harness and the capacity to ably absorb emerging opportunities linked to the oil and gas activities which is expected to drive demand as the country enters the development and production phase.
Dr Ggoobi said that the government is committed to ensure that people are also engaged in the development of the oil and gas sector players.
“We visited the Stanbic Business Incubator in Hoima and what they are doing there is quite impressive. My team is going to review this and ensure that the communities living within these areas are prioritised to consolidate these efforts,” he said.
Dr Michael Nkambo Mugerwa, the General Manager Uganda Refinery Holding Company Ltd, a subsidiary of Uganda National Oil Company (UNOC) revealed that the new projections by government indicate the oil and gas industrial park, once operational, is expected to bring in USD 8bn annually which is about 7.7% of Uganda’s current GDP that stands at USD 37.7bn.
Progress on the ongoing projects
Tilenga Project
The site preparation works on the Tilenga Industrial Area currently stands at 60% completion rate.
The Industrial Area will host the main Tilenga surface facilities which include the Central Processing Facility (CPF), the Construction Support Base (CSB), the Drilling Support Base (DSB), the construction Camp (CC) and the Operators Support Base (OSB).
MotaEngil was contracted by TotalEnergies E&P Uganda to undertake the site preparations. The scope of work includes bush clearing, levelling, compaction, drainage and fencing among others.
The Kingfisher Development Project (KFD)
Construction works for the KFD have commenced following the award of the Procurement Contract (PC) 1 to Excel Construction Ltd, a Ugandan company.
Site preparation civil works on the Kingfisher well pads 1, 2 and 3, in preparation for the development drilling is expected to commence in December 2022.
The scope of work to Excel Construction Ltd includes levelling, compacting, drainage, fencing and construction of infield access roads.
On March 7, 2022, a total of 86, 24-inch conductor pipes were delivered to the well pads.
Installation these conductor pipes requires welding the pipes together before they are run into the ground.
Site preparation works currently stands at 10.10% against a planned 10.34%.
