Ugandan Town Gets Oil Lift

Uganda is edging towards the production phase of its nascent oil and gas sector.

One area that is already getting a feel of the anticipated positive spin-offs is Hoima town in Hoima District.

To get a real feel that something is happening in Uganda’s oil industry, this is the place to be, apart from being at the wells themselves.

The town that is now rightly referred to as ‘Uganda’s Oil hub’. It is a beehive of activity as old one-storied, clay-walled and rusty iron sheet structures give way to larger more modern buildings.

These include offices, hotels and recreational centres.

The town now boasts of several commercial properties and bigger financial institutions that have instantly improved infrastructure.

Two oil companies are clearly, interested in showing Hoima residents they are here for the long haul.

Chinese oil firm, CNOOC, has unveiled an impressive office block overlooking the town centre.

During a dinner organized to officially open CNOOC’s new offices, Aminah Bukenya, CNOOC’s Public Relations Supervisor said the building will help take services closer to the people.

“This office now makes it easier for our people to access us rather than trekking all the way to Kampala. We are optimistic that this step will help cement our relationship with the locals,” she said.

She said the new offices open an avenue for employment opportunities for the locals.

CNOOC is the only oil company to have been granted a production license. They have been managing the Kingfisher field since September 2013.

Zakaria Lubega, the Corporate Social Responsibility Manager at CNOOC said the company plans to construct roads, widen an airstrip as well as increase their funding to the education sector in the district.

According to the energy ministry 115 exploration and appraisal wells have drilled in the Albertine Graben to date. About 101 of them have encountered hydrocarbons with a drilling success rate standing at over 85%. Some 28 wells have so far been flow-tested.

The ministry adds that investment by the oil and gas industry in seismic surveys, exploratory and appraisal drilling topped $2.5 billion by the end of 2013.

Recently, a statement released by the Ministry of Energy and Mineral Development announced that the process of selecting a contractor to build Uganda’s first refinery is well underway.

Two bidders SK Group led consortium from South Korea and another Consortium led by RT Global Resources from Russia are the two companies left in the bidding process to select a contractor to build Uganda’s refinery.

According to the Ministry’s Permanent Secretary, F.A Kabagambe-Kaliisa, government will now commence negotiations with the two bidders and thereafter issue a request for the Best and Final Offers (“BFO”) document.

“The two consortia will be expected to submit their respective Best and Final Offers by the end of August 2014. Government will then negotiate the Principal Project Agreements with the highest scoring Preferred Bidder and once executed, take forward the development of the project”, he is quoted as saying.

Earlier, two other firms, PETROFAC from the United Arabs Emirates and VITOL SA from Switzerland withdrew their interest in the project.

‘There has been sharp increase in investment after the first commercial discovery. This investment has been important in progressing the country’s oil and gas sector and is expected to increase significantly during development, production, refinery development and attendant pipelines development,’ reads part of a report from the Ministry.

The refinery project is to be established under a public private partnership (PPP) arrangement with the Uganda government holding up to 40% equity.

It involves development of a refinery, crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near the country’s capital.

Source : East African Business Week

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