The Independent Uganda: You get the Truth we Pay the Price
What Chinese, French domination of Uganda’s oil and gas supplier database means for Ugandan entrepreneurs
Kampala, Uganda | RONALD MUSOKE | As pressure to develop key upstream infrastructure picks up with billions of dollars expected to pour into the Ugandan economy starting this year, focus is now turning onto who is likely to take home the biggest chunk of the oil dollars.
The government has over the last three years been asking Ugandan entrepreneurs to register on the national oil and gas supplier database if they intend to take a share of the US$20 bn that is expected to be sunk into a wide range of infrastructure projects, including; an export pipeline, an oil refinery, a products pipeline, an international airport and a myriad other oil field projects in western Uganda.
“We have been telling the Ugandan private sector, don’t let this money pass us by,” Irene Muloni, the Minister of Energy and Mineral Development said recently, “Let us be part of the process.”
Senior government officials say if exploited well, Uganda’s oil and gas industry has the potential to boost the competitiveness of home grown businesses while stimulating nationwide development.
For a country whose current GDP is US$27bn, government officials say it is critical to retain a significant portion of this investment in the country.
Peninah Aheebwa, the technical support service director at the Petroleum Authority of Uganda (PAU), said during the launch of the database in 2017, that there are up to 26 services ring-fenced for Ugandan entrepreneurs including; transportation, work safety products, road construction, security and hospitality. These are the sectors that are less technical and where local capacity exists.
The suppliers’ database is to help the government know the experience and capabilities of qualified Ugandan and foreign companies in the sector in order to enhance transparency in the procurement process.
PAU also intends to uphold the legal requirements on local content, unless the joint oil venture partners demonstrate that there are no Ugandan entities that meet the standards before going for foreign companies.
This means that Ugandan suppliers interested in providing goods and services to the fledgling oil and gas sector are also required to build partnerships with their international counterparts if they are to fully participate in the multi-billion dollar opportunities expected in the next couple of years.
The Uganda Chamber of Mines and Petroleum has in the recent past consistently advised local suppliers to partner with national players to enhance their capabilities as the oil and gas sector is a capital intensive business. But can this aspiration be realized considering recent developments on the National Oil Suppliers’ Data Base?
French, Chinese firms join the dance
An investigation by The Independent has found that of the more than 1700 firms that the Petroleum Authority approved in June, last year, to do business in Uganda’s oil and gas industry; close to 300 are French, British and Chinese in origin.
A section of observers say this could be a big handicap for Ugandan entrepreneurs considering that the joint venture partners currently overseeing the development of the infrastructure have either worked with them in similar projects elsewhere or come from their home countries.
For instance, the China Offshore Oil Engineering Company Ltd (COOEC), is a subsidiary of CNOOC that won and implemented last year the contract to do a front end engineering design study for the Kingfisher oil field on the southern tip of Lake Albert—a project that is under CNOOC.
