Dr Chol Deng Thong Abel, chief executive officer Nile Petroleum Corporation has urged Ugandans to take bold steps in joining oil and gas exploration and production in-order to learn.
Dr Deng said like in South Sudan, Ugandans have to create joint operating companies (JOC) with international oil companies. He explained that JOC should have president who is foreign, human resource, health safety and environment positions should be taken by locals
“Money has to be fund government’s share in the JOC. When they go for stratigraphic studies led by the expatriates, the nationals will walk with them and learn and grow”, Dr. Dengl said.
Uganda National Oil Company (UNOC) Ltd and China National Offshore Oil Company (CNOOC) signed a Memorandum of Understanding (MoU) to open a partnership in exploration in the Albertine Graben.
The function took place on 5th September 2018, Beijing, China. The MoU which was signed by Dr. Josephine Wapakabulo, CEO UNOC and Fang Zhi, the Chairman of CNOOC international and was witnessed by President Yoweri Kaguta Museveni, Mr. Sam Kuteesa, Minister of Foreign Affairs and Mr. William Byaruhanga, Attorney General.
Government of Uganda is in the process of commercializing the crude oil discoveries made in the country, currently estimated at 6.5 billion barrels, of which 1.2 – 1.7 billion barrels is recoverable. The commercialization options include development of a refinery, a crude oil export pipeline and crude for power generation.
The MoU indicated that UNOC and CNOOC will work together to develop a block in the Albertine Graben in Western Uganda. This implies that more crude oil shall be discovered to support the projected production profile of already discovered resources that are under development as well as to create an avenue for UNOC to grow its exploration capabilities and begin its journey towards a fully-fledged oil company able to perform operatorship roles.
UNOC and CNOOC will kick-start the process of applying for the identified block and start exploration activities as soon as the Ministry of Energy and Mineral Development grants them a license. This partnership is expected to further open up opportunities within and outside of Uganda.
UNOC hopes to rely on CNOOC’s experience as a national oil company to grow its capabilities and expertise. However unclear funding sources to this activity by Government might delay the progress.
The former executive secretary of the Nigerian Content Development and Monitoring Board Dr Ernest Nwapa recently urged Uganda to ensure that substantial activities in the oil and gas sector are done within the country to promote local participation that enables the growth of local industries, employment creation and value addition.
Dr. Nwapa in a key note address at a local content stakeholder dialogue held at Hotel Africana said Uganda should promote and put into regulations the principle of domiciliation. Domiciliation is the act of making a particular country the legal place of business for companies.
“We want the oil companies to domicile activities in Uganda, when you allow work to be done outside your country you deprive people opportunities to innovate to get jobs; you create those same opportunities for others. How will you train your mechanical engineers if they do not get experience on the shop floor,” Dr. Nwapa said.
Dr. Nwapa noted that when the idea of domiciliation was mooted there was an outcry that businesses would be frustrated and that there was no local capacity. He said nearly all activities in the oil and gas sector can moved from abroad and done locally whether it is welding, fabrication, engineering designs and maintenance.
He said Uganda has made a case for local content and strong government support for implementation is very important. Investing in local content is not just good for nationalist favour but it is good for business. He added that a key principle in promoting local content was domiciliation.
He asked Ugandans to look at the history of Nigeria where he said since 1956 when commercial oil exploration commenced in Nigeria, until early 2000, the Nigerian oil and gas industry had not made a substantial trickle- down effect on its economy, especially in its contribution to GDP.
“The industry was inundated with a number of factors which prevented it from having the desired impact on Nigerians and the Nigerian economy. Materials and equipment were sourced from foreign countries, fabrication of key components were done abroad, engineering design were carried out abroad, there was little local value addition, no job creation and core skills resided with foreigners,” Dr. Nwapa said.