KAMPALA/BULIISA/HOIMA —Ugandans have been urged to stop asking when the first barrel that signals start of oil production will be announced but to understand that Uganda has already benefited from Oil discovery.
Executive director at Petroleum Authority of Uganda Mr Ernest Rubondo said although the ever-shifting date for Uganda’s first oil is now 2022; Uganda has achieved a lot in terms of investment.
Mr Rubondo said the discovery of oil in Uganda should not be looked at as a curse as some people have speculated, but instead as a blessing to citizens.
While addressing the media at Protea hotel in Kampala Mr Rubondo said Ugandans should not focus on when the first barrel of Oil will be produced but should look at the benefits so far gained from the discovery to date when the country is thinking about refining the oil.
“We already have the benefits of Oil on ground by the fact that companies have invested heavily in the Albertine region so Ugandans should stop asking when the first barrel of oil will be produced but should focus on the benefits so far” said Mr Rubondo.
Mr Rubondo said in April last year Uganda signed a deal with a consortium, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost $3 billion-$4 billion and that all this investment is in Uganda.
Records at Uganda’s oil and gas industry indicate that the department is expected to rake in investments worth over US$ 1 billion this year.
According to ministry of energy, the outlay for 2019 is part of the close to US$20bn that the government expects over the next three years as the joint venture oil company partners step up activities to commercialize Uganda’s petroleum resources.
The developments of the upstream projects are being taken forward by the three joint venture partners, CNOOC Uganda Ltd, Total E&P Uganda and Tullow Uganda Operations Pty Ltd.
Mr Ibrahim Kasita, the UNOC corporate affairs manager said the local communities now have improved access to healthcare, education, electricity, safe drinking water, transport infrastructure, cleaner and less costly energy, and employment prospects.
He added that moreover, communities have benefitted from auxiliary business opportunities.
Mr Kasita revealed that schools in Kaiso Tonya village worth $600,000 and a $2 million investment that Tullow, spent on a health centre V in Buliisa District and that the oil company has also spent $150,000 on Kyehoro Health Centre II since 2007.
During the visit to Buliisa organised by PAU, Tullow also said it has spent $600,000 (Shs1.5 billion) as a discretionary investment to support the opening of an enterprise centres in Hoima in partnership with Traidlinks, a not-for-profit specialist in enterprise and market development.
This initiative, according to Mr Kasita has helped over 2,000 farmers get advice on how to use compensation funds, access seeds and market.
Ms Irene Muloni, the Minister of Energy and Mineral Development said recently that the government expects a pick-up in activity in the sector this year following a calm 2018 that involved designs of key production infrastructure such as the East African Crude Oil Pipeline and the two central processing facilities.
She said the government has also revised its timelines for first oil by 24 months to 2022 following a series of missed deadlines.
At the time the government announced the 2020 first oil timeline; many observers said the schedule was quite ambitious considering the range and cost of infrastructure involve.
We have developed infrastructure to produce the oil and this includes drilling and completing more than 400 wells, setting up two central processing facilities, laying of over 200km of in-field flow lines, laying approximately 150km of feeder pipelines, construction of base camps and minor access roads, among others.
“And besides employment, all these are benefiting the local person in the Albertine region and other parts of the country,” said Ms Muloni.
Records indicate that Uganda as an Oil producing country has got oil money in form of signature bonus, training fees, annual surface rentals, data purchase, permit fees, withholding taxes, capital gains tax, value added taxes and royalties.
Most of the money has been paid directly to governments in form of taxes but oil money also comes into the economy through payments to local labour, through corporate social responsibility (CSR) expenditures, and through payments to the local service providers.
The Oil companies claim to have injected Shs10 trillion strewn over a 10-year period, although from the presentations from the three biggest players shows that most of the money has been spent in the last five years.
With a Shs10 trillion injection from one nascent sector with over Shs5 trillion of that injected in the last five years, Uganda’s economy, according to the African Development Bank Economic outlook, has grown by more than 5% since 2012, the lowest in 10 years.
Oil investments in Uganda since its dicovery
Tullow Oil investments
Total investment since 2004: $2.8 billion
Acquisition of heritage oil’s Ugandan fields: $1.45 billion
What remained in Uganda is $1.35 billion
Investment in exploration and appraisal from 2009 to 2010: $ 343 million
Investment in exploration and appraisal between 2004 and 2008: $395 million
Investment in exploration 2012 and 2013: $267 million
Payments in 2012
Corporate taxes: $142 million
VAT, PAYE, Withholding tax and other government payments: $33 million
Local suppliers: $47.5 million
Payroll for Ugandan employees: $44 million
Social investment since 2012: $12 million
Social investment 2012: $4.8 million
Masters scholarship in Engineering and geology
Five students at Makerere University: $190, 000
Africa gifted foundation: 100 students aged 14-16. Total cost: $50000
Kyehoro health centre II since 2007: $150,000.
Discretionary investment to support the opening of an enterprise centre in Hoima: $600,000.
Total’s investment in Uganda since 2012: $600 million (Shs1.56 trillion)
Cnooc’s investment in Uganda since 2012: $500 million (Shs1.3 trillion)