Over the weekend, we were blessed and privileged to host one of Uganda’s partners in business and a member of the East African Community, who was recently sworn in as the President of the United Republic of Tanzania after the passing of President John Pombe Mugufuli.
H.E Samia Suluhu Hassan was in Uganda on her maiden international visit as President, to witness the signing of three agreements: the Host Government Agreement, the Share Holders Agreement and the Tariff and Transportation agreement, for the East African Crude Oil Pipeline project. The EACOP is a cross border pipeline from Hoima in Uganda to Tanga in Tanzania. The signing ceremony marked the official launch of Uganda’s oil and gas projects, which will enable the oil companies issue contracts for the construction of the required infrastructure.
Uganda is getting closer to becoming one of Africa’s oil producing countries. Africa has from the past had a number of oil producing countries which include Libya which has 48.5 billion barrels worth of reserves, Algeria with 12.2 billion barrels, Nigeria with 37.1 billion barrels, and Angola 12.7 billion barrels. These four countries held 84.8% of Africa’s reserves. Some of the other countries with noteworthyestablished oil resources are Egypt which has 3.9 billion barrels, South Sudan with 3.5 billion barrels.
Other oil producing countries include Gabon, Equatorial Guinea, Republic of Congo, and Chad. Since then, a number of countries has been emerging and these include Uganda which has 6.5 billion barrels of oil so far, and Kenya, Tanzania, Mozambique and several other countries.
Petroleum exploration in Uganda dates back to the early 1920s, when oil seeps were first reported, but rigorousassessment work commenced in the 1980s.Aeromagnetic data in 1983 confirmed the existence of various potential oil bearing basins in the Albertine Graben. This was followed by the enactment of the Petroleum Exploration and Production Act in 1985. This Act led to the licensing of international companies to undertake seismic surveys and drilling.
Fifteen years ago, Uganda finally discovered commercially viable oil deposits in the Albertine region, with various discoveries including Kingfisher, Mputa, Waraga, Nzizi, Kasamene, Kigogole, Nsoga, Wahrindi, Ngara, Ngege, Ngiri, Jobi-Rii, Gunya, all now under production licenses.
Uganda is expected to produce 230,000 barrels of oil per day (at peak), which is expected to boost economic growth. Commercial oil production is expected soon and all signs now show that the construction work for the required production and transportation infrastructure is set to start, following the signing of the three agreements, which marked the official launch of the projects.
The Albertine region, and specifically the areas where oil has been discovered, were historically underdeveloped.
However, with the discovery of oil in this area, the region is already seeing benefits such as improved infrastructure (roads and an airport), employment opportunities and increase business opportunities. It is very crucial that the Government figures out how to encourage the participation of all Ugandans in the oil sector through the use of local labour, goods and services during oil and gas activities.
I am certain that once production starts, the revenues will enable our government to invest in with massive infrastructural and social development throughout the country; this industry will be one of the most important contributors to the national treasury.
Since the discovery of oil in the Albertine, a lot has been done in preparation for production;
The oil companies and government are acquiring the required land and compensating the affected persons; the environment impact assessment studies have been approved; and the engineering studies have also been undertaken.
In addition to the refinery, a new airport, a road network within the community, a tarmac road linking the new development to Hoima and a hospital are also planned to be constructed. The Hoima-Kaiso-Tonya road, which connects Homa, Kaiso and Tonya along the eastern shores of Lake Albert passes through Kabaale Village, Buseruka sub-county, in Hoima District, where Uganda Oil Refinery is planned to be constructed.
Also in the pipeline is Nzizi Power Station, a 52MW thermal power plant which will use both natural gas and heavy fuel oil as raw materials.
Because of the activities happening in the Albertine in preparations for oil production, there is an increased economic activity in the area. Hoima town which is near Kabaale Township, has been upgraded to city status, due to increased infrastructure to handle the new businesses and new residents. Land prices, rental rates and other real estate costs in the area have gone up in the recent past, as demand for real estate in the town and surrounding areas has increased.
In terms of Road constructions, UNRA is currently supervising a total of 700kms of roads providing accessibility to the Albertine region, reducing travel times, and improving access to markets and services. According to UNRA464Kms are under construction and completion is expected by early 2022.
The Ministry of Lands Housing and Urban Development has also helped a lot in increasing rural accessibility to markets and services, preparing selected key urban centres for growth, and providing economic infrastructure targeted to key sectors in the region.
On the other hand, the Ministry of Education and Sports has designed and upgraded business, technical and vocational education, and training institutions to provide internationally certified training in the oil and disciplines.
Some of the institutions specializing in Gas and Oil studies include Uganda Petroleum Institute Kigumba (UPIK) and Uganda Technical College Kichwamba.
Now that we are set to start the actual operations that will lead us to first oil, there are some issues that government should look into and make sure that they are implemented.
The government should develop an all-inclusive and evidence-based programme to strengthen the vocational skills training at Kigumba Petroleum Institute and other institutes that are training people in the various oil related courses.
Government should make sure that the local manufacturers adopt modern technology and innovative solutions to produce products that align with the quality of goods and services needed in the oil sector.
As I conclude, I will have to say that we are finally in THE THING since OUR OIL is finally here so I ask all Ugandans to get involved, seek employment and business opportunities from the oil companies and their contractors. It is our time to benefit from the oil sector, you may not get the oil itself in your hands, but very many opportunities will be available and I personally think the middle income status that we have been chasing for is finally here.
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