According to the Petroleum Authority of Uganda, PAU, Investments in the sector were worth 500 million dollars last year, which was almost double the figures for 2019.
"The year 2022 is going to commence the period of three years of intense infrastructure development in preparation for first oil in 2025," says EC Rubondo
Amidst all this, the migration from fossil fuel to cleaner sources of energy is also gathering pace, with the automotive industry, which is the main consumer, increasingly going for battery-powered electric engine vehicles.
This will form part of the partnership between the business incubator and an agricultural firm Pure Grow Africa, to improve the standards and quality of foodstuff supplied to oil companies. The move will also see farmers in the region get registered on the National supply database and also have timely information on what is required.
The late Magufuli was due in the country with his line ministers to sign off the deals on the pipeline company shareholding plan and the crude oil transportation tariff, which were the last remaining issues.
At least 29 houses with land titles, were handed over to the Project Affected Persons-PAPs at Uduk II Village Ngwedu sub-county, Buliisa district on Monday, as part of the Tilenga Resettlement Action Plan Implementation. One house is yet to be fully completed.
The project’s overall objective is to help develop the capacity of local Uganda MSMEs along the East African crude oil pipeline by enabling them to access new market opportunities and build linkages with larger, national, regional and international companies. The project aims to support inclusive private sector growth and the creation of an estimated 500 jobs along the pipeline.
More than 7,000 people were relocated from the villages in Kabaale, Buseruka sub-county, Hoima district where the government acquired a 29-square kilometre piece of land to pave way for the construction of an oil refinery, and resettled in Kyakaboga.
Petroleum Authority Executive Director, Earnest Rubondo said the first five years have been characterized by building the institution while on the same time regulating the country’s oil and gas assets.
The two agreed on the conditions of how the Uganda National Oil Company (UNOC) will join and participate in the East African Pipeline project, as well as on the Host Government Agreement which will govern the export pipeline in Uganda. The project is expected to cost the consortium USD 3.5 billion with construction expected to start early next year.
The EITI boosting of a membership of 54 countries worldwide lays a foundation for transparent and accountable management of a country’s natural resource wealth.
It sets out standards of disclosure of all information along the extractive industry value chain from the point of extraction, revenue generation and sharing, awarding of contracts and licenses, to final expenditure of all proceeds.
The transaction is conditional upon the approval of the company’s shareholders who will meet on July 15. The process of approval according to the rules, requires a simple majority shareholding approval. They are expected to vote and approve the deal before the sale can be concluded in Uganda.
Tax on capital gains will be remitted by Total Uganda on behalf of Tullow Uganda – this will be equivalent to USD14.6 million (Shs 55.6bn). The deal collapsed last September because the companies could not agree with government on taxes and recoverable costs.
Dennis Kakembo, a partner at Cristal Advocates, a law firm that analyses trends in the oil sector, said if the oil prices remain significantly below USD 50 a barrel, it would not make business sense for companies to invest in Uganda’s sector. It is likely to delay Uganda’s projects as investors wait to be certain of the future.
Rubondo like other players insists that Final Investment Decision is simply an event adding that what is a key is for those planning to participate is to make adequate preparations as well as participate in ongoing works.
The government initially hoped that the first oil would come out in 201. But the deadlines have since been changed six times to 2022. However, this all awaits the pronouncement of Final the Investment Decision –FID. The same pronouncement will open Uganda to possible investments in the oil and gas sector.
But the Final Investment Decision which would constitute decisions made by various partners to inject money in projects to commercialize Uganda’s oil resource still eludes the country as joint venture partners Total E&P, China National Offshore Oil Company-CNOOC and Tullow Oil Plc continue to register setbacks to their efforts.
The women say following the discovery of oil and gas in their area, local women have not been fully engaged and empowered by the government on how they can be prepared to tap in opportunities accruing from oil and gas sector something they say could make them not to benefit from the sector.
Bunyoro Kitara Kingdom Prime Minister Andrew Byakutaga says that the delay in announcing the Final Investment decision is grossly frustrating efforts by local investors to tap into opportunities in the oil and gas sector. Byakutaga cites individuals who had invested in hotels, Agriculture, construction and other businesses to supply the oil and gas sector.