Glory Summit Hotel, Hoima (Courtesy photo)
The slow pace of oil activities that has driven some oil companies to halt some major activities has also hit the hotel industry in Hoima.
Government’s exploration of the commercially viable oil deposits in the Albertine Grabben in 2006 raised expectations for the industry to boost competitiveness among home grown investors and stimulating inclusive development.
In preparation for the exploration phase, several local and foreign stockholders invested heavily in the hotel industry with the hope of accommodating and feeding people who would be working in the oil and gas sector.
Initially, government hoped that the first drop of oil would drip in 2021 but headlines have been changed to 2022. However, it all awaits the procurement of the Final Investment Decision (FID).
The delay in reaching the FID that has seen some oil activities halt some key activities in the Albertine Belt, is grossly impacting on the hotel industry in the district.
The Managing Director of Glory Summit Hotel-Hoima, Mr Donald Bakire Bategeka, told Kazi-Njema News on Thursday that business is at its slowest because there are no major oil activities taking place in the absence of the FID.
He said earlier, he would get at least 30 clients working in the oil and gas sector on a daily basis, but this has now taken a downward spiral trend since oil companies halted their operations.
Mr Bategeka said that the hotel is considering laying off some staff because of the huge and unsustainable wage bill. He said the hotel had over-recruited in anticipation of a big clientele. However, it is a twist of things with Mr Bategeka saying that a number of staff members will be downsized.
Mr Collin Ochan, the Manager of Hoima Buffalo Hotel said that Total E&P’s current suspension of activities on the development of the East Africa Crude Oil Pipeline (EACOP) has greatly frustrated the hotel industry in Hoima.
He added that the current situation may force a number of investors to abandon the hotel industry.
“The present slow flow of clientele to hotels is greatly affecting the business and if the oil sector continues like this, it will force some investors to abandon the hotel industry [in Hoima]”, said Mr Ochan.
Total E&P suspended key activities on the construction of the EACOP in September 2019. The move stemmed from Tullow’s announcement of farm-down to Total E&P and the termination with China National Offshore Oil Corporation (CNOOC) on August 29, 2019 over the capital gain tax dispute with the government of Uganda.
In 2006, Uganda discovered 6.5 billion barrels of oil in the Albertine Grabben., about 2.2 barrels of which is recoverable.