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.
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
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
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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
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.