Eighteen major contracts worth Shs14.1t ($4b) have so far been approved and awarded to different Tier One Contractors in the Tilenga and East African Crude Oil Pipeline (EACOP) Projects, the Director Legal and Corporate Affairs at the Petroleum Authority of Uganda (PAU), Mr Ali Sekatawa, has disclosed.
Of these, 13 which include among others; Industrial Area Site Preparation, Access Roads, Wellpads, EPSCC, Mud togging Services, Electrical Logging Services, OCTG, Wellheads and Waste Management are in Tilenga while EPCM, EITS, Thermal Insulation, Line Pipes Supply, Logistics, Pipeline Construction are in EACOP.
“All these contracts have been awarded to Tier One Companies who will in the next phase start sub-contracting and this is where our Ugandan companies will enter in. There are ongoing works in most of these sites,” Mr Sekatawa said.
Tier 1 contracts are multi-million or billion dollar contracts that are given to major companies who also sub-contract several companies in Tier 2 who later also sub-contract companies in Tier 3 or enter into a joint venture with international companies to offer the goods and services.
The recent major contract is the Shs7t ($2b) which Total awarded to a consortium of a subsidiary of McDermott International and Sinopec International Petroleum Service Corporation, a US-Chinese Company to provide EPCC services in Tilenga project.
The contracts are being awarded by oil companies Total E&P Uganda (TEPU) who own majority stake, and China National Offshore Oil Corporation (CNOOC), who are expected to invest between $15b and $20b in the sector the next five years with approval from the government through PAU.
Speaking to journalists during the Virtual Africa Centre for Media Excellence (ACME) Extractives Reporters Networking meeting via zoom yesterday (Tuesday), Mr Sekatawa noted that all the 5,523 Project Affected Persons in the Tilenga project were compensated, thus, completing the land acquisition process for the Central Processing Facility (CPF) fully acquired by April 2021.
“Construction works for the CPF have already commenced RAP 2-5 (water abstraction areas, 31 well pads, flow lines, feeder pipeline and access roads) and financial literacy completed and payment commenced in August 2021.” He said.
He added that in Kingfisher Development Project, 727 PAPs, three RAPs are being finalised for the required land for the CPF, flow lines, feeder line, temporary camp and other facilities.
“Over 99% PAPs have been compensated and are benefitting from the livelihood restoration programmes. 5,000 chicks to 291 PAPs on September 2, 2021, plus livestock, fisheries and farm inputs that have been in place since 2020 have been distributed to the PAPs.”
On the 1,443km EACOP project, Mr Sekatawa said the disclosure process for the 3,792 PAPs is currently being undertaken and compensation will start this month with a target of December for all PAPs.
On August 30, 2021, cabinet approved the EACOP Bill, 2021, which will be tabled before Parliament to enable the kick-start of the project.