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Bunyoro Kingdom Bothered by Slow Pace of Oil Activities

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.
Andrew Byakutaga, the Bunyoro Kitara kingdom Prime minister.

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The Bunyoro Kitara Kingdom has raised concern over the delay by the government and the joint venture partners Total E&P, China National Offshore Oil Company-CNOOC and Tullow Oil plc to make the Final Investment Decision-FID that could allow the immediate commencement of commercial oil production in the Albertine Graben. 

In 2006 the government of Uganda discovered approximately 6.5 million barrels of commercially viable oil deposits in the Albertine Graben of which 1.4 billion is recoverable raising expectations for the industry to boost competitiveness among homegrown investors and stimulate inclusive development. 

In 2017, the government rolled out a campaign to enable indigenous entrepreneurs to register on the National Oil and Gas database if they are to benefit from the USD 20 billion (74 trillion Shillings) funding that the World Bank sunk in development of infrastructure projects. 

The crucial projects include the construction of the oil refinery in Kabale Buseruka in Hoima district, the East African Crude Oil Pipeline Project and Hoima International Airport, all meant to facilitate oil production. 

The government initially hoped that the first oil would come out in 2013 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.    

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.  

He wants the government and the international oil companies to come out clearly and give their current position on when the FID will be made saying most of the local investors acquired loans from the banks to set up their projects.   He says the current suspension of activities on the development of the East African Crude Oil pipeline by Total E&P has greatly frustrated the Kingdom and the local investors.       

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Total E&P suspended all activities on the East Africa Crude Oil Pipeline on September 5.  The move stemmed from the decision of Tullow on August 29, 2019, to terminate its farm-down deal with Total E&P and CNOOC over the capital gains tax dispute with the government.

The EACOP project is one of the midstream commercialization projects for Uganda’s oil and gas industry. Once built, it will be the longest heated crude oil pipeline in the world, at 1,443km, running from Kabaale in Hoima district to Tanga port in Tanzania.  

Byakutaga says most of the kingdom subjects who had secured jobs with some of the joint venture partners like National Offshore Oil Company -CNOOC lost their jobs when the partners closed liaison offices in the region. 

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He has however rallied the local investors and the Kingdom subjects to be patient as government and the International oil companies are doing all it takes to have the Final Investment decision taken.  

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It is, however, paramount to note that for the Final Investment Decision to be made, there are five key considerations by the international Oil companies to be addressed including technical feasibility, commercial reliability, Economic viability, risk and financing.   

The government of Uganda has heavily invested in the Infrastructure, Technology, security, legal and fiscal framework as well as human resource to ensure that the international oil companies are satisfied and can tick all the boxes leading to the signing of the Final Investment Decision.   

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