Local Content Will Not Just Happen, AUGOS’s Kwesiga Warns

The chairman Association of Uganda Oil and Gas Service Providers (AUGOS), Prof. Charles Kwesiga, has warned that Ugandans must work hard to develop skills and capacity if they are going to maximally participate in the development and production of the country’s oil and gas natural resources.

“No oil company is going to hire a half baked welder. No oil company is going to take a risk of putting people to build a pipeline who are not qualified,” Prof. Kwesiga noted last week while speaking to journalists in Kampala during a press conference to announce an upcoming industry dialogue.

“You must develop those skills. You must understand what the requirements are. Unlike other most operations where it is enough to be a relative of someone to get a job, that doesn’t happen in the oil and gas industry,” he warned.

The AUGOs, launched in 2012, is an umbrella body that brings together service providers in the oil and gas industry. It has since expanded its membership. AUGOS member firms employ over 9,000 people and most of them are Ugandans.

Together with Association of Tanzania Oil and Gas Service Providers (ATOGS) will host a Local Content Stakeholder Dialogue on March 28th-29th 2018 at Hotel Africana in Kampala, the capital of Uganda.

The two day dialogue will be held under the theme, “Unlocking local content opportunities in the oil and gas sector”, and according to Prof. Kwesiga intends to create a meaningful discussion around full exploitation of business opportunities in the industry and enhance capacity and readiness of service providers.

“There are a lot of issues pertaining local content and the most important that our association is trying to elaborate is understanding the value chain,” he noted, elaborating that the value chain starts from exploration, production, refining, logistics, delivery and distribution.

He asserted that you need skills along the value chain but ‘not just going to the oil well and get the oil out.’ Uganda has already walked a few feet into the value chain having finished with the first phase of exploration and now is into development and eventual production.

Uganda’s first oil is expected in 2020. Both governments and international oil companies are doing what is necessary to beat the deadline. A Final Investment Decision (FID) expected this year when the oil companies are finished with the relevant FEEDS.

Already activities like construction of support infrastructures are underway. A 2014 Industrial Baseline Survey (IBS), titled, “A survey to foster opportunities for Ugandans in the Oil and Gas sector” pointed out that many jobs and opportunities will be available during the development phase.

This is why it is critical that Ugandans and local enterprises start participating in the industry now. Ahlem Friga Noy, the Corporate Affairs Manager Total E&P Uganda, at the same press conference emphasized the need for Ugandans to participate in development of the country’s oil and gas.

“It is indeed very important because the participation of local content or man power in a project of this magnitude is actually the key and our role and duty is that we contribute towards building local content in Uganda.” She said.

“It is about making sure that when it comes to manpower the right standards, the right skills and the right certifications are reached. And when it comes to service providers there is also a question of standards which must be met.

“We strongly believe that it is important when you start a project like this in a country where oil is quite nascent, partnerships between international and national companies are developed because it is a formidable way to ensure transfer of knowledge, skills, capacity building, increasing standards and meeting requirements.

Dennis Kamurasi, the vice chairman of the association explained that local content in Uganda has been having a problem in terms of capacity.

“We have been trying as businesses and as an association to build some of these competencies. Key among these is training,” he said, adding that it will be unfortunate if the majority of you Ugandans don’t participate in this project.

The incompetence in local content has been facilitated by many factors among which are delayed formulation of necessary laws and policies to guide the private sector and lack of access to credit for local businesses to acquire the needed capital for investment.

These and many more are some of the issues that will be discussed at the dialogue as the private both in Tanzania and Uganda attempt to unlock the opportunities oil and gas present to these two developing countries.

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