Rubondo like other players insists that Final Investment Decision is simply an event adding that what is a key is for those planning to participate is to make adequate preparations as well as participate in ongoing works.
A section of potential suppliers to
the oil and gas sector is upset that the country’s oil and has remained
underground almost 15 years since its discovery.
But the oil and gas industry players including
the Petroleum Authority say despite the delay, Ugandans are not prepared yet to
exploit the opportunities.
While some would be suppliers complain
about the slow progress in the oil sector, Petroleum Authority Executive Director,
Earnest Runbondo says the delay may be a blessing in disguise saying most of
the huge deals would have gone to foreign firms.
Suppliers to the oil and gas
sector expected a beehive-like activity by this period if the international Oi Companies
had made a Final Investment Decision(FID) by end of last year.
The International Oil Companies,
Tullow, CNOOC and Total have been reluctant to make a Final Investment Decision
for the Kingfisher and Tilenga projects in the Albertine after the collapse of
Total, Tullow farm down negotiations. The government declined to approve the $900 million farm down to Total and CNOOC .
An FID should have stated how much
capital will be invested, expected return on investment, sources of funding,
project duration and commercial risks involved in the two projects.
While Rubondo agrees that delay in
the Final Investment Decision(FID) has led to inactivity in the Kingfisher and
Tilenga developments, Ugandans should be reaping big from other ongoing
activities like construction of the Kabale Airport and the oil roads.
////Cue in “You could see the construction people……….
Cue Out…. there is also this other 300 million dollars”/////
Rubondo
like other players insists that Final Investment Decision is simply an event
adding that what is a key is for those planning to participate is to make
adequate preparations as well as participate in ongoing works.
Some of the big jobs in the over one-billion-dollar
construction of oil roads have gone have gone to international construction firms.
Some of the local construction firms have not been able to absorb of the $300 million
or 10% as part of the national content requirement.
Challenges
for local participation
Engineer Patrick Batumbya, one
of the shining examples of Ugandan
engineers who have worked on the oil roads admits the most of the engineer
would have still missed to cash in from the Tilenga and Kingfisher projects
even if the Oil Companies had made the Final Investment Decision.
He told URN that part of the challenge
is with training and meeting the some of the local and international standards
for such projects.
////Cue IN “What do you do with engineers,
with contractors who are not resourced? We don’t have access to funds, so we cannot
buy equipment to absorb 300 million dollars. You don’t have equipment because
you don’t have aces to capital, you don’t have capital, you are already on the cycle
of poverty. So where is the breaking point?”/////
Batumbya says some of the engineer
who may have earned some jobs during exploration stages for jobs like surveying
and design of oil pads but when it came to Front End Engineering (FEED), there
was no capacity in Uganda.
Batumbya says all the local
construction firms ended up getting Environment Impact Assessments and
survey works jobs while the more lucrative were taken by foreign engineering and construction firms .
He says the local firms are again stuck
during the Engineering, construction and procurement (EPC) stages because they
have not built that capacity to take 30% of the one-billion-dollar oil roads
and related works.
Information from Uganda National
Road’s Authority indicate that there are for foreign firms working on the critical
oil roads with about 25 local subcontractors in the Albertine.
Oil
Roads Opportunities
Construction firms are urged to
take advantage of some of the existing or upcoming projects but not wait for
the Final Investment Decision pronouncement by the Joint Venture CNOOC, Tullow
and Total over a taxation disagreement with Tullow.
Uganda National Roads Authority,
Chief Transport Economist, Davis Brian Muhwezi says local firms can compete the
upcoming two critical oil road construction. He says the two contracts with a
combination of four projects can be lucrative for local construction firms.
Muhwezi says instead of waiting
for the FID, local contractors should build their capacities so that they take
up 30% of the job reserved for local firms.
////Cue IN “ At a certain point…….
Cue Out……to do other roads“///
An Industrial Baseline Survey
commissioned jointly by International Oil Companies in Uganda noted that only two sectors security
services and cement manufacturing) met the quantity and quality requirements of
the oil industry as of 2013.
The just concluded Second National
Content conference in Kampala identified a number of linkages in areas of agriculture, tourism,
oil and gas education, transport among others that are yet to be exploited as Uganda gear up to oil production.
