Home Oil & Gas Uganda approves oil policy to benefit locals

Uganda approves oil policy to benefit locals




Uganda this week approved a new policy that will enable locals to benefit from the huge oil and gas investments in the east African country. 

Ofwono Opondo, the government spokesman, told reporters that Cabinet sat on Monday and approved the policy that will see more Ugandan companies and citizens get contracts to supply goods and services to the lucrative sector. “The policy will increase the use of domestically produced or available goods and services by the Oil and Gas Industry; and promote the in-country Research and Development and Technology transfer to Ugandans,” Opondo said.    The Petroleum Authority Uganda, a state agency regulating the sector, recently listed a number of oil and gas related products which can be provided by local companies and citizens. Among the products to be provided are transport, security, foods and beverages, hotel management and office supplies. So far 1,277 entities have been verified to supply different products to the oil and gas sector. 

 Although the policy is now in place, experts are urging the government to help in building the capacity of the locals to be able to provide the goods and services that conform to the international standards in the oil industry.  They warn that failure to build the capacity will still provide the opportunities to foreign companies to take up the jobs because the oil companies will not compromise the set standards.  Ministry of energy and mineral resources figures show that over 161,000 jobs would be created in the sector as the construction of the refinery and crude oil pipeline start.  Construction of the 1,445km crude oil pipeline that will run from the Albertine region to the Tanzanian seaport of Tanga will cost 3.55 billion U.S. dollars while the 60,000 barrels of oil per day refinery that will be constructed in the oil wells will cost of 4 billion dollars.  “We need to work towards skilling our workforce to ensure they are well positioned to tap into the many opportunities that are being envisioned,” John Chrysestom Muyingo, minister of state for higher education told an oil forum in April this year.  “The lack of involvement of citizens at all levels in the exploitation and use of the natural resources will hinder the trickledown effect of this oil resource, consequently impacting the economy negatively,” Muyingo added. 

The government is accrediting various institutions both public and private to at least teach the basics in the sector. The number of public and private institutions offering short courses in oil and gas is increasing. Sunmaker, a Chinese company in conjunction with China University of Petroleum and Uganda’s ministry of education, opened up an oil training institute in the capital Kampala in April. The institute targets to train more than 4,000 people every year in different disciplines. The students would later be awarded internationally recognized certificates. The World Bank also offers scholarships to students to gain skills in the oil and gas sector.   

Oil exploration companies in the country, for instance France’s Total, have offered scholarships for people to train in welding. The company in March started to train at least 200 Ugandan youths in welding in preparation for works in the Albertine region and along the crude oil pipeline route.  Jacob Opolot, vice chairperson of the Parliamentary Committee on Education, said that it may not be possible for the country to have enough skilled laborers before the oil works start. He said some jobs will have to be shared out with foreigners. Opolot noted that the most important thing is for the country not to totally miss out on the jobs.Uganda expects to start the commercial production of oil by 2020. The country has so far discovered over 1.64 billion barrels of recoverable oil.  



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