Uganda’s sizeable reserves, enabling regulation, and proactive national oil company is positioning the country as a regional hydrocarbon leader, and African Energy Week in Cape Town will promote it
KAMPALA, Uganda: Uganda has emerged as a formidable oil and gas competitor and African Energy Week (AEW) 2021 in Cape Town will showcase it. With sizeable reserves, enabling regulation, and a proactive national oil company that prioritizes local participation, inclusivity, and capacity building, the country is positioning itself as a force to be reckoned with, and AEW 2021 in Cape Town (9th-12th of November 2021) will drive this narrative.
In a recent working visit to Uganda, the African Energy Chamber (AEC) emphasized the role that AEW 2021 will play in showcasing the country’s energy progress, placing Uganda as a top priority at Africa’s premier energy event in order to drive associated dealmaking.
Despite representing a relatively new hydrocarbon sector, Uganda – with its 6.5 billion barrels of proven crude oil reserves and 0.5 trillion cubic feet of natural gas – has made significant progress in establishing a competitive oil and gas industry. Under the leadership of H.E. President Yoweri Museveni and the recently inaugurated Hon Ruth Nankabirwa, working together with Ernest Rubondo, the Executive Director of the Petroleum Authority of Uganda and Proscovia Nabbanja, the CEO of the Ugandan National Oil Company, Uganda has accelerated hydrocarbon exploration, large-scale project developments, and regional synergies, driving widespread socio-economic growth in the process.
Uganda boasts participation by some of the world’s leading International Oil Companies (IOC). Since 2004, Tullow Oil has played a pivotal role in developing Uganda’s oil and gas sector, with significant discoveries made in the Lake Albert Rift Basin in 2006 and 2009. Similarly, Heritage Oil Plc. has been a major contributor of Uganda’s industry success through discoveries such as the 600-million-barrel drilling campaign in the Albert Basin and the Kingfisher Well in 2008. Both companies have been instrumental in opening up several basins in the country, accelerating associated developments and establishing a competitive sector. In 2020, Tullow sold its assets to Total, which, in collaboration with China’s CNOOC, has been driving growth across the entire value chain.
Although the participation of IOCs have been valuable in expanding Uganda’s sector, it is the active participation of the UNOC that has positioned the country as a regional competitor. Notably, the UNOC, whose overall function is to manage the government’s commercial interests in the petroleum sector and ensure resources are exploited in a sustainable manner, has played a significant role in driving progress. Even throughout the COVID-19 pandemic, whereby price and operational impacts hindered progress, the UNOC has not only managed to sustain operations, but excel.
Under the guidance of Proscovia Nabbanja, the UNOC has overseen a range of projects across the entire energy value chain. In the upstream sector, notable projects include the 40,000 barrel per day (bpd) Kingfisher Project; the 190,000 bpd Tilenga Project; as well as the exploration of new ventures in the country’s second licensing round. In the midstream sector, projects include the Kabaale Industrial Park – comprising the country’s second international airport, a crude oil export hub, and the Uganda refinery -; the 60,000 bpd Uganda Refinery Project; and the monumental 1,443km, 216,000 bpd East Africa Crude Oil Pipeline (EACOP) – connecting Kabaale-Hoima in Uganda with the Chongoleani peninsula near Tanga port in Tanzania. Finally, downstream projects include downstream petroleum trading; the Jinja Storage Terminal; and the Kampala Storage Terminal – which will serve as regional pipeline hub. By showcasing these projects to global stakeholders in Cape Town, AEW 2021 is committed to boosting investment in Uganda’s burgeoning sector.
“AEW 2021 has placed Uganda as a top priority in Cape Town. The country’s significant resources, political will, and active local business sector will position the country as a regional leader, warranting an increase in foreign investment and associated developments. Projects such as the EACOP – made possible by the commendable leadership of H.E. President Yoweri Museveni and H.E. President Samia Suluhu Hassan – represent fundamental opportunities for both local and regional companies, and opens up the region for petroleum investment through the establishment of a viable export route. AEW 2021 will showcase Uganda, its enabling environment, and its incredible leadership, driving dealmaking and partnerships in the process,” stated NJ Ayuk, Executive Chairman of the AEC.
Meanwhile, in addition to playing an active role in the sector, the UNOC and the Ministry have placed a focus on domestic capacity building through the emphasis of women inclusivity, local company participation, and the transfer of skills from IOCs to local companies. Projects such as the EACOP present the unique opportunity for local companies to actively participate in the country’s oil and gas sector, not just as commission agents, but as active participants. By seizing the opportunities brought about by the EACOP, and targeting partnerships and joint ventures with regional actors, local companies will be enablers of a successful oil and gas industry in Uganda.
“Now is the time for a re-focusing on dealmaking and joint ventures between local and international companies. Gone are the days where international service companies can take advantage of local companies. Through the prioritization of local capacity building, skills transfer, and increased inclusivity, Uganda can position itself as a regional industry hub. AEW 2021 in Cape Town will not only showcase Ugandan opportunities, but will emphasize local content and the role that local companies and women have to play. By enhancing capacity building and the promotion of domestic inclusivity, Africans can become leaders in regional projects such as the EACOP,” continued Ayuk.
Uganda’s pragmatic, steadfast and progressive leadership, in conjunction with its commendable regulatory environment, has elevated the country to hydrocarbon success. By promoting the role of women, local companies, and enabling regulation at AEW 2021, as well as showcasing the abundant opportunities present in the sector, Uganda will drive investment and regional collaboration, further positioning the country as one of Africa’s top energy destinations.
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Lead image: Ernest N.T. Rubondo, Petroleum Authority Uganda and NJ Ayuk, Executive Chairman, African Energy Chamber