Uganda Contractors Assured On Oil Deals

Members of the Construction Hardware and Dealers Association (CHADA) have been assured of business in the oil and gas industry. However, they have been told to first get organized and plan for what awaits them.

During a conference arranged by the Association held in Kampala last week, manufacturers, whole sellers, importers and service providers heard that as oil and gas industry approaches the midstream stages of its value chain, enormous opportunities will be availed to them.

“The whole value chain (from upstream, midstream and downstream) is business that needs to be done. These are services we can deliver as business people,” Nelson Ofwono the National Content Manager at Tullow Uganda told the meeting.

He said an Industrial Baseline Survey was undertaken by the leading oil and gas exploration companies, Tullow, Total and CNOOC to know what exactly will be needed to produce oil.

The survey seeks to understand the business environment and analyze local capacity to supply the demanding but rich industry.

Tullow’s Ofwono said the survey which has been finalized also recommends ways to fill the gaps which have been identified.

He says once the local companies fail to meet the needs of the oil companies they will miss out because oil firms will import such good and services.

He noted that Uganda is at the end of the upstream business heading to midstream which will offer tenders in transport, construction, housing, hotels among other businesses.

He told the association members that Uganda is nearing that stage where the scope will widen and demand for local content will rise.

Many times the ill financed local content providers claim that oil firms technically kick them out of business by making demands they cannot meet because of their financial incapability.

Largely lack of experience in the industry, high credit costs, an inexperienced regulation regime and environment health standards are some of the challenges hurting the local content providers.

Ofwono said developing national content is good for the economy, creates value through capacity development for Uganda companies and brings about a g institutional policy.

Uganda has been estimated to have 3.5 billion barrels of crude.

Source : East African Business Week

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