Uganda’s delayed oil production creates better content policies – Tanzania

Tanzania's Energy and Water Utilities Regulatory Authority (EWURA) and the Petroleum Authority of Uganda (PAU) delegations during and inspection visit to oil and gas resource facilities. (Image credit: PAU)

Uganda’s delay to develop its oil and gas resources has helped it to prepare the ground, according to Prof Mark Mandosya, the Board Chairperson of Energy and Water Utilities Regulatory Authority (EWURA) of Tanzania.

EWURA is Tanzania’s regulator of oil related activities.

Prof Mandosya observed that Uganda has taken a longer stride in its oil and gas sector saying it has surpassed many countries in Africa in encouraging and ensuring that Ugandans participate actively in the sector.

He said the Petroleum Authority of Uganda (PAU’s) steering of a robust local content framework for the oil and gas sector is a feat for the country.

“I should say that I’m impressed with the progress of work and the number of Ugandans employed on this project,” he said.

This was during a review meeting between the Petroleum Authority of Uganda and EWURA after a week-long supervisory visit from Dar-es-Salaam following the East Africa Crude Oil Pipeline (EACOP) route.

The PAU Board Chairperson, Dr Jane Mulemwa, said Uganda is committed to developing its resources in a sustainable manner that is beneficial to both Uganda and Tanzania.

“The benefits realised and those expected to be realised from the production and commercialisation of these oil and gas resources are indeed enormous and will positively impact the economies of both countries,” she said.

Ms Peninah Aheebwa, the Director Economics and National Content Monitoring at the PAU, said Uganda’s commercialisation strategy entirely lies on optimal exploitation of the oil and gas resources and ensuring the country retains a good percentage of the investments.”

“We have approved contracts worth US$6.9bn since the announcement of the FID (Final Investment Decision) and of these, at least US$1.7b has been earmarked for Ugandans at the different levels,” she said.

Ms Aheebwa attributed Uganda’s score in the national content front on contract unbundling, encouraging subcontracting and joint ventures.

She disclosed that 92% of the more than 6,800 employees in Uganda’s oil and gas sector are Ugandans.

The delegation visited some of the resettlement houses handed to the Main Camp and Pipe Yard (MCPY) 1, 3 & 4 in Kakumiro, Sembabule and Kyotera respectively.

The MCPYs will be used for storage of pipes, piping and equipment for the construction of the EACOP and act as construction support bases.

The PAU and EWURA are jointly monitoring and regulating the construction of the 1,443km EACOP project that will transport Uganda’s crude oil from Kabaale village in Kabaale sub-county, Hoima district in Uganda to the port of Tanga at Changoleani in Tanzania prior to being shipped to the international market.

National Content Policy

Uganda’s National Content Policy requires every entity that is to be contracted for the oil and gas activities to register on the National Suppliers Database (NSD) – an online repository that is overseen by the PAU.

This gives visibility on companies that are given contracts by the International Oil Companies.

The PAU is charged with approving of contracts in the oil and gas sector and requires every contractor to submit a national content plan before it is awarded a contract.

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