Understanding Oil & Gas Value Chain Critical For Ugandan Companies

Panelists discussing opportunities in the oil and gas sector Panelists discussing opportunities in the oil and gas sector

Uganda will in the near future become an oil producing country, this means that local companies and individuals have an opportunity to economically participate in this lucrative venture.

But to do this, there are requirements which they must meet so that they qualify and sustainably participate in the oil and gas sector. While the most important part in the production and trade of oil and gas is technical, having the requisite knowledge and skills is key, especially for SMEs and non-technical low entry jobs.

Speaking at the The Stanbic Enterprise Conference 2019, Kevin Wingfield, Head of Personal and Business Banking, mentioned that it is critical for Ugandans to understand the oil and gas value chain.

“If you are a business, do you understand the oil value chain and who the key players are, and where your opportunities will come from: Total E&P, CNOOC, etc.? Are you already building business networks, awareness and access to contract tenders?” Wingfield said questioningly. 

“This is not about oil but all the related products and services that will be required to support: Infrastructure, construction and building materials, accommodation, agriculture, hospitality and catering, logistics, transport, consulting, etc.” he explained.

The banker alluded that meeting the legal and regulatory requirements for local content, having access to the requisite inputs, capabilities, capacity, credit and skills to scale and meet the expected demand are some of the issues local companies must address.

He added that local companies must be in position to meet the required standards of quality, be consistency, reliable and with good governance practices required by international oil companies to secure contracts and sustain them.

The oil and gas sector presents a $20bn opportunity for Uganda before any oil is extracted. It is believed that the $8 -9bn will go into the upstream to support development of the oil fields, while $7bn into midstream, for construction of the refinery and the EACOP.

The downstream side of the business is expected to attract $2-4bn to support local infrastructure. In all this, local companies are expected to participate but after meeting national content requirements.

Stanbic Bank runs a business incubator SME development programme that aims at building capacity for small enterprises. It address some of the challenges that SMEs face.

Some of the challenges include lack of entrepreneurial, management and business skills, lack of business plans and financial records, limited and insufficient financial resources, low corporate governance, disrespecting contracts and competition.

Tony Otoa Okao, Head of Enterprise Development, says Stanbic Bank established a business incubator to enable SME’s overcome capacity & other challenges. He said the incubator will provide an enabling environment for SMEs to enhance their capacity, enabling them to survive, operate successfully & grow.

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