Farmers in oil-rich Hoima District were keen to sell produce to the camps accommodating oil workers in the district, but didn’t know how—and for several years the camps sourced their food from Kampala or even overseas. Now, with the camps set to expand as Uganda moves towards oil production, the door has been prised open by Traidlinks, a non-profit organisation backed by some of Ireland’s leading businesses, including Tullow Oil. Chantal Sirisena reports.
HOIMA DISTRICT: “Accessing the new market was difficult,” says Paul Kasaija, a farmer in Hoima. “We were asking ourselves – why can’t we supply [the oil camps]? Why does produce have to come from South Africa and elsewhere?”
If you thought Uganda’s fledgling oil industry was all about Tullow, Total and CNOOC, think again. Those companies own rights to explore for and extract the resources, but their operations depend on an army of contractors. Some specialist contractors—such as Halliburton, Baker Hughes, Schlumberger or Saipem—are huge corporations in their own right, with multi-billion dollar annual turnovers. Others are more modest, locally grown enterprises. Contractors do everything from supplying, transporting and operating the drilling rigs, mixing chemical lubricants and sealants to pour down the holes, building pipelines and refineries (if Uganda ever gets round to that), insuring the operations against environmental and/or legal catastrophe . . . right down to laundering the oilmen’s clothes and making their lunches.
Chantal Sirisena and Allan Ssempebwa spent the month of August exploring this wider sector. Recently published, in our OIL PLAYERS|OIL INDUSTRY section, are their results: profiles of 23 oil industry contractors, great and small, headquartered in Milan, London, Houston, Cracow or Kampala, doing business in Uganda. Below, the authors summarise and reflect on their findings.
Growing demands from cultural leaders for a share of oil revenues could spark ethnic conflicts among marginalized communities in mineral rich areas of Uganda, analysts say.
“If communities begin demanding higher percentages, it will set precedents. Mineral sites may bring conflicts as they start fighting for their shares of royalties. Far from bringing wealth and health, we may not get political hygiene but ethnic politics,” according to Makerere University History and Development Studies don, Ndebesa Mwebestya. Read More
Uganda’s oil discovery has created market openings in several sectors, and universities are among those seeing opportunities, aiming to create petroleum courses that can supply professionally qualified technical and managerial staff.
For a long time only Makerere University’s Department of Geology and Petroleum Sciences offered a petroleum-related qualification: a Bachelors degree in Geology. Yet before the discovery of oil in 2006, its graduates had few chances to work in a relevant field and some were forced to move on to other fields.
Things have now changed. Read More
The oil industry in Uganda will be the most capital intensive that the country has ever seen. Many ordinary people believe that it may also result in mass job creation, alleviating unemployment and under-employment—said by some reports to run as high as 80 per cent among rural youth—that not only blights lives but could also foment social and political unrest.
But the reality is that the oil industry is notorious for consuming large sums of money in its operations, while employing relatively few people, most of whom have particular expertise. Worse still, manpower requirements in the industry decline with time, meaning that when facilities have been built and the oil is flowing regularly, semi-skilled jobs will all but disappear. Read More
The Minister for Information in the Bunyoro-Kitara Kingdom has urged government to give special consideration to people in the oil producing areas as compensation for losses they may incur once oil production begins.
“Our people are going to face the effects of environmental degradation, social and political problems. They deserve additional benefits over and above other Ugandans,” said Moses Kirungi. “How can you hunt an animal on my land, slaughter it and take away all the meat without leaving some of the kill for the owner?” Read More
Uganda’s proposed National Oil Company will have the right to acquire a 15 percent stake in the oil fields that Tullow Oil, TOTAL and CNOOC are developing, according to Eoin Mekie, Tullow’s General Manager in Uganda, speaking exclusively to Oil in Uganda.
The arrangement was included in the agreements signed between Tullow and the government in early February, in defiance of a parliamentary moratorium on further oil contracts.
Mr. Mekie welcomes the creation of a National Oil Company, saying that “It will certainly cement our relationship with the government once we actually start working alongside them.” He adds that Tullow, CNOOC and TOTAL are ready to build the capacity of a National Oil Company that may also want to take up exploration options in other blocks when new licensing rounds begin.
However, Mr. Mekie also reveals that the government has “not yet shared its refinery plans” with the international oil companies, and that the companies and government need to reach “a concensus on what a basin-wide development will look like over the next five to ten years.” Read More
The first graduating class from the Uganda Petroleum Institute-Kigumba has gone to Trinidad and Tobago for hands-on training in the oil industry. This is a great opportunity for the lucky 24 students—but shows how much remains to be done for Uganda’s rapidly increasing and largely jobless young population. Vocational training for the sector lags way behind demand, and oil is unlikely to bring direct employment on the scale that Uganda needs.
Amid the excitement and uncertainty surrounding Uganda’s impending oil production, the Kitara Heritage Development Agency (KHEDA) has set out to provide information on the latest developments to people in the oil-rich Bunyoro region. Oil in Uganda talked to Wilberforce Bigabwenkya, the Project Manager of the KHEDA Oil Information and Resource Centre, about the project. Read More