Frequently Asked Questions
The foundation of Uganda’s oil and gas sector is laid out in the National Oil and Gas Policy, which was approved by Cabinet in 2008. As part of efforts to operationalise the Policy, new legislation for the oil and gas sector in Uganda was developed. This includes:
- The Petroleum (Exploration, Development and Production) Act 2013
- The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013
These laws, commonly referred to as the Upstream and Midstream Laws, became effective in April 2013 and July 2013 respectively. The Upstream Act repealed the Petroleum Exploration and Production Act of 1985.
The Ministry of Energy and Mineral Development (MEMD) subsequently developed regulations, to operationalise the two Acts and these are:
- The Petroleum (Exploration,Development and Production)Regulations 2016
- The Petroleum (Exploration, Development and Production) (Health, Safety and Environment) Regulations 2016
- The Petroleum (Exploration, Development and Production) (National Content) Regulations 2016
- The Petroleum (Exploration, Development and Production) (Metering) Regulations 2016
- The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Regulations
- The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations, 2016.
- The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (Health, Safety and Environment) Regulations, 2016.
Uganda’s oil and gas industry is also regulated using other sectoral laws, statutes and guidelines on Environment, Wildlife, Water, Income Tax, Land, among others.
Uganda’s Petroleum Laws and Regulations are in the public domain and can be accessed at the relevant offices free of charge. The Petroleum Laws and Regulations can also be downloaded online via www.pau.go.ug.
The East African Crude Oil Pipeline (EACOP) special Provisions Act, 2021 will facilitates the implementation of the EACOP Project in Uganda.
International regulatory best practice for the oil and gas industry policy recommends separation of the three key functions of Government, namely Policy oversight and licensing, Industry regulation and the business/commercial aspects.
Therefore, this is the model that Uganda adopted, thus unbundling Government’s principal roles for the oil and gas sector, through the creation of separate new bodies namely, the Petroleum Authority of Uganda (PAU) and the Uganda National Oil Company (UNOC), independent from the Directorate of Petroleum (DoP) in the Ministry of Energy and Mineral Development (MEMD).
Consequently, Uganda’s Petroleum policy and laws provides that in this sector, the MEMD through DoP, is responsible for Licensing of players together with Policy formulation and oversight; the PAU has the mandate for Monitoring and Regulating the sector, while UNOC is responsible for the Commercial and Business aspects in this sector. This model is based on the need to ensure efficient oversight and management of the sector, as it progresses and expands from exploration to the development and production phases.
Uganda’s governance model further provides for other Ministries, Departments and Agencies (MDAs) to take charge of important components of the oil and gas sector, within their expertise. This model, therefore, allows for the PAU to have regulatory independence over the sector and its key players.
The PAU’s mandate is to monitor and regulate the exploration, development and production, together with the refining, gas conversion, transportation and storage of petroleum in Uganda.
This includes ensuring that petroleum operations in Uganda are carried out in accordance with the relevant laws, regulations, guidelines, statutes and in line with international best practice for the petroleum industry. In line with the above, the PAU is required to ensure that the development in the oil and gas sector contributes to value addition in the country and creates lasting value to society.
The key regulatory areas include efficient resource management, commercialisation, environment and social protection, management of petroleum data, stakeholder engagement, economic analysis, cost efficiency, national content development, and health, safety and security.
The PAU formulated and is implementing a five- year Strategic Plan (2020/2021 – 2024/2025), following the expiry of its initial three-year strategic plan (2017/2018 – 2019/2020). The Strategic Plan is aligned with the Sustainable Development of Petroleum Resources Programme Implementation Action Plan (PIAP) and the National Development Plan (NDP) III.
In pursuance of the PAU’s vision and mission, the theme for this five-year Strategic Plan of the PAU is “Delivering While Growing”, with a goal of “Unlocking Uganda’s Oil and Gas Industry for Sustainable Development”. In order to achieve the intended Goal of this Strategic Plan, four key pillars underpin the PAU’s Strategic Objectives. These four pillars are:
Pillar 1: Institutional building
Pillar2: Efficient petroleum resource management
Pillar 3: Facilitate commercialization of the discovered oil and gas resources
Pillar 4: Enhance the impact and sustainability of the petroleum sector
In line with the pillars, the Strategic plan intends to achieve the following objectives:
- Ensure efficient production and utilization of the Country’s oil and gas resources;
- Contribute to strengthening the policy, legal, and regulatory framework as well as institutional capacity of the oil and gas industry;
- Enhance the opportunities for nationals and national enterprises to participate in oil and gas activities;
- Contribute to promotion of private investments in the oil and gas industry;
- Enhance Quality, Health, Safety, Security, Social and Environment (QHSSSE) management.
Article 244 of the Constitution of Uganda vests the ownership and control of minerals and petroleum in the Government on behalf of the people. The Government therefore holds all resources in trust for the people of Uganda. The Constitution also empowers Parliament to make laws regulating the exploration and exploitation of minerals and petroleum. In this regard, Section 4 of the Petroleum (Exploration, Development and Production) Act 2013 vests petroleum resources in the Government on behalf of the people.
Oil is formed when organic matter (plants and animals) is buried at sufficient depth and subjected to high temperature that transform the organic matter into liquid and gaseous form (known as hydrocarbons), after sufficient time. Hydrocarbons can only exist where a working petroleum system is in place: with a source rock, reservoir rock, migration path and a seal/ cap rock.
Uganda’s oil and gas discoveries have been made in the Albertine Graben, which is one of the country’s six sedimentary basins. Oil is typically found in sedimentary basins; a basin is a depression formed as a result of earth movements that cause a depression to be formed in the earth’s surface.
Twenty-one (21) oil and/or gas discoveries have been made in Uganda’s Albertine Graben and the resources are estimated at 6.5 billion barrels of oil in place. The recoverable resources (which can be produced currently) are estimated at 1.4 billion barrels of oil. One barrel is equivalent to 159 litres.
Geological factors including the fact that oil in the subsurface is stored in rocks with pores (similar to water in a sponge) and within structures, makes it impossible to recover 100% of the resources. The amount of oil to be recovered depends on the properties of the rock such as how the pores within the rock are connected to one another, reservoir pressures and type of oil, among others. Globally, an average of 20% to 30% of the oil in place is recovered economically using the available technologies. Enhanced Oil Recovery (EOR) methods are also often used to increase the amount of oil recovered from an oil field using different technologies to supplement the natural production. EOR is used to improve movement of oil in the oil field and the different methods of EOR include polymer flooding, gas injection and steam flooding.
The area that has been explored so far represents less than 40% of the Albertine Graben, which is currently the most prospective area for petroleum production in Uganda. There is therefore potential for additional petroleum resources to be discovered in the Albertine Graben when additional exploration is undertaken. Other than the Albertine Graben, there are five other sedimentary basins in Uganda. These are Moroto-Kadam basin, Lake Kyoga basin, Hoima basin, Lake Wamala basin, and the Lake Victoria basin.
The mandate of assessing potential for oil discoveries in Uganda lies with the Directorate of Petroleum under the Ministry of Energy and Mineral Development. More information can be found on the website: www.petroleum.go.ug. Preliminary exploration work by the Ministry over the Moroto-Kadam basin is ongoing, together with licensing of additional acreage in the Albertine Graben.
In Uganda, at a projected peak production rate of about 230,000 barrels of oil per day, it is estimated that the current discovered resources can last 25-30 years. The length of time that oil and gas resources last in any given country largely depends on the amount of discovered resources and the rate at which these resources are produced. This rate is determined by many factors, including technical, strategic and economic reasons. However, additional exploration and appraisal is expected to be undertaken in the country, and this could lead to additional resources being discovered in the country, hence prolonging this production period. It is important that these resources are produced gradually in an efficient manner and at an economic rate that will also provide a sustained benefit to the country.
The depth at which hydrocarbon deposits are found varies greatly around the world. Very shallow deposits of less than 30 metres were found in the early days of exploration. Today, it is common to produce oil from more than 3,000 metres. In Uganda, petroleum has been encountered at varying depths between 290 metres and 3,000 metres in the discoveries that have been made in the Albertine Graben to date.
Different types of crude oil are produced around the world. Two of the most important quality characteristics of oil are its density and sulphur content. Density ranges from light to heavy, while sulphur content is characterised as sweet or sour. Crude oils that are light (with degrees of API gravity above 360) and sweet (low sulphur content) are usually priced higher than heavy, sour crude oils. Uganda’s crude oil has an API range of 170C~ 330C, with a low sulphur content. However, it is waxy with an average pour point of 400C and hence solidifies at room temperature. Uganda’s crude oil is therefore described as sweet and medium to heavy.
The country currently is estimated to have about 0.5 trillion cubic feet (Tcf) of Gas stored underground. We expect 70% to 80% of this gas volume to be recoverable, similar to other oil and gas fields worldwide whose geological setting is relatively identical to the Albertine Graben. Uganda is, therefore, majorly an oil province compared to countries like Tanzania and Mozambique, with gas reserves of 57 trillion cubic feet and 100 trillion cubic feet, respectively
Predominantly, gas resources have been commercially discovered in the Albertine Graben in the districts of Hoima, Kikuube, Bulisa, Nwoya and Ntoroko. The first gas commercialization will happen at the Tilenga (TotalEnergies) and Kingfisher (CNOOC) project by 2025 following the announcement of FID by the Joint-Venture (JV) partners on February 1st, 2022.
The Joint Venture Partners TotalEnergies E&P, CNOOC Uganda Ltd, and Uganda National Oil Company (UNOC) will all be involved in the production and utilization of both oil and gas resources in Uganda. The associated gas that will be produced with the oil will be mainly used in (1) generation of heat and power/electricity for use in the operations, and (2) processed to provide Liquified Petroleum Gas (LPG) which could be sold both locally and regionally. The option for exporting the gas is currently not feasible given the relatively small volumes discovered so far.
Therefore, the gas will initially be used to satisfy the energy needs of the production operations. Whatever is excess would then be used to meet the country’s energy demands. This is part of the evaluation being done to choose the optimal solution for excess gas utilization
The gas resources are commercially viable and can be used for power generation. In addition, natural gas can be used for domestic purposes such as heating and cooking. It can also be used as fuel for vehicles, the production of iron and steel from iron ore, in fertiliser plants and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. Natural gas can also be re-injected into the reservoirs to maintain pressure to support production of crude oil through enhancement of oil recovery. Alternatively, after processing, gas can be used for on-site electricity generation or used as feedstock for different petrochemical industries. Another possibility is to export natural gas as a liquid. Gas-to-liquids (GTL) is a developing technology that converts natural gas into synthetic gasoline, diesel, or jet fuel.
The technical schedule for the projects indicates that First Oil will be achieved 36 to 45 months following the announcement of Final Investment Decision (FID) on February 1st, 2022, by the Joint Venture Partners TotalEnergies, CNOOC Uganda and UNOC.
The drilling of development and production wells for the Kingfisher Project in Kikuube District started in January 2023, while the delivery and assembly of the three drilling rigs for the Tilenga Project is ongoing. Enabling infrastructure works for the other required facilities including the central processing facilities, well pads, flowlines, and camps remain on course. This implies numerous opportunities are available for micro, small, medium, and large enterprises. These opportunities are not limited to the Oil and Gas sector but include opportunities in hospitality, transport, skills development, health, housing amongst others. Therefore, Ugandans need to be aware and prepare to have the capacity to meet the Oil and Gas sector standards and partake in all the opportunities that the developments will generate.
The test crude oil stored at the different sites is viable and shall probably be blended with the oil that will be produced and taken through the CPF in Buliisa. The quality is good and shall remain so since the storage containers are very well built to maintain it in good condition. The bitutainers (containers) in which it is stored have a mechanism of heating it so that it does not solidify and loose its quality.
Nwoya district is unique in the context of the Uganda’s oil and gas industry because the oil discoveries in Nwoya district are situated within Murchison Falls National Park. Government, therefore, made the decision to ensure that the necessary infrastructure for the oil and gas activities is set up outside the national park, to minimise the environment footprint. In addition, the centrality of the locations was considered for economic feasibility; the Tilenga project wells cover a wide geographical area, and with Kabaale as the focal point, it made more economic sense to situate the CPF and other infrastructure in Buliisa district as opposed to Nwoya.
The Governments of Uganda and DRC (then Zaire) signed an agreement of cooperation in 1990, to allow for joint exploration and exploitation of resources across the border by either country. An addendum to the agreement was signed in 2007 to provide for how any fields falling across the border would be shared in line with the principle of unitisation. This agreement allows establishment of the percentage of the field in each country and thereby determine each country’s share at the time of production. The two Governments have held discussions on the ongoing work in the Albertine Graben, exchange of technical data and visits to the Albertine Graben to understand the exploration work, among others.
It is, however, important to note that the discoveries made in Uganda to date are not on the common border with DRC. The Governments of the two countries continue to have regular dialogue to ensure harmonious development of the resources on either side of the border.
There are five international oil companies which are currently licensed to undertake petroleum exploration, development, and production in the country. These are: Armour Energy Limited (AEL) and DGR Global from Australia, and Oranto Petroleum Limited (OPL) from Nigeria which are undertaking Petroleum Exploration in the Kanywataba Contract Area, Turaco Contract Area, and the Ngassa Contract Areas. CNOOC Uganda Limited (CUL),TotalEnergies E&P Uganda B.V. and UNOC are Joint Venture Partners and are licensed to undertaken Petroleum Development and Production Operations in the Kingfisher Development Area, Contract Area 1 and 1A and License Area 2.
In the Midstream, the Albertine Graben Energy Consortium (AGEC) is leading the development of the refinery, whereas the EACOP Company with shareholding of TotalEnergies, Cnooc Uganda Ltd, UNOC, and the Tanzania Petroleum Development Corporation (TPDC) is leading the development of the EACOP Project.
These companies, together with the different goods and service providers whom the licensed companies’ contract from within and outside Uganda, represent the key private sector players in the oil and gas sector.
In accordance with section 66 of the PEDP Act 2013, when a discovery is made, the licensee is required to notify the Government and submit a technical evaluation. The licensed Oil Company appraises the discovery to determine the extent of the discovery and the characteristics of the crude oil therein by drilling additional (appraisal) wells and/or undertaking well testing. Following completion of appraisal and interpretation of the data acquired during appraisal, the company applies to the Minister, MEMD for a production licence and this application is supported by a Field Development Plan (FDP) which details how the company intends to produce and transport the petroleum in the discovery. The company also submits a Petroleum Reservoir Report (PRR) that describes the technical understanding of the reservoir below the surface.
These reports are reviewed by Government and discussed with the company until an agreement
is reached and a production licence is issued by the Minister. The PAU advises the Minister of the application for Production Licenses. The company then prepares the field for production by drilling injection and production wells and putting in place other surface facilities for production and processing of crude oil.
Preparation of the already discovered oil fields for production (development), will be undertaken under two separate projects, the Tilenga project in Buliisa and Nwoya districts, and the Kingfisher project in Kikuube and Hoima Districts.
The Tilenga Project includes a Central Processing Facility (CPF) with capacity to process 190,000 barrels of oil per day, and over 420 wells which are planned to be drilled on 31 wellpads. The CPF is an infrastructure used to process crude oil, which is received directly from the oil wells, by removing impurities and water and separating the produced gas from the crude oil. The Tilenga project is also planned to have 180 kilometres flow lines which will transport crude oil within the oil fields and a 110 km feeder pipeline which will transport the processed crude oil from the CPF in Buliisa to the export hub and refinery in Kabaale.
On the other hand, the Kingfisher project has a planned CPF with a capacity of 40,000 barrels of oil per day and 31 wells (11 injectors and 20 producers) to be drilled on 4 well pads. The project is planned to have 16 kilometres of flow lines and a 55km feeder pipeline from the CPF in Buhuka, Kikuube district, to the Export Hub and refinery in Kabaale, Hoima district.
The produced resources from the fields will be refined in country and/ or exported to the international market.
Armour Energy Uganda Limited (AEUL) was issued an Exploration Licence (EL – 01/2017) over Kanywataba Contract Area on 14th September 2017. The Licensee implemented work programs in 2018 and 2019 related to Geological and Geophysical studies, reprocessing of existing seismic data and acquisition, analysis, and interpretation of Geochemical soil samples. The company is currently assembling equipment in preparation for drilling of exploration wells.
Oranto Petroleum Limited (OPL) holds two Exploration Licences for Ngassa Shallow Play Contract (EL – 02/2017) and Ngassa Deep Play Contract Areas (EL – 03/2017), which were issued on 10th October 2017.
OPL is currently undertaking studies related to aspects of petrophysics, geomechanics, well engineering, Phase-2 Lake drilling solution, Evaluation of Petroleum Resources and Project economics of the Ngassa Contract Area.
The objective of the above studies is to help the companies undertake a comprehensive evaluation of the petroleum potential of the block. In addition, the studies will inform the Licensees and Government on the possible location for drilling of the exploration wells.
DGR Energy Turaco Uganda was awarded an exploration license for the Turaco Block on 12th May 2023 while UNOC was awarded the exploration license for the Karuban Block on 3rd February 2023. These are yet to commence any field activities.
Following the completion of the second competitive licensing round, the Ministry of Energy announced that plans are underway for the launch of another round of competitive licensing round for the Albertine and Hoima Basins. Preliminary exploration activities have also been caring out in the Moroto-Kadam Basin.
- Use of crude oil and gas for power generation, which will involve utilisation of associated gas (gas produced with oil) to generate power to support field development and production operations;
- Supply of crude oil to a 60,000 barrels per day Refinery to be developed in Uganda to meet national and regional petroleum products requirements; and,
- Export of Crude Oil through an export pipeline.
Uganda’s commercialisation strategy for the discovered 6.5 billion barrels of resources provides for both refining in country, and export of crude oil. Feasibility studies for both projects were undertaken, and Government approved the development of a 60,000 barrels per day refinery in Hoima, and a crude export pipeline with a capacity of up to 219,000 barrels per day from Kabaale, Hoima to Tanga in Tanzania.
Both projects are economically feasible and offer various benefits. The refinery will also ensure security of supply of petroleum products to Uganda. In addition, the refinery will create jobs for Ugandans, promote industrialisation while saving foreign exchange which would have been used to import petroleum products. The crude export pipeline will provide an alternative outlet for produced oil to ensure return on investment for the licensees and Government. The Hoima (Uganda) – Tanga (Tanzania) route was selected as more secure, at a cheaper cost and a lower tariff.
The development of the refinery and the EACOP projects are being undertaken co-currently, and when both projects are operational, the refinery will have first call on crude oil produced. Having both projects will also ensure continuity in production, especially during periods when either project may be shut down for maintenance.
The Government of Uganda, through the Ministry of Energy and Mineral Development, acquired 29.57 km² of land near the oil fields of the Albertine Graben Region for the development of a Petroleum based Industrial Park. The Industrial Park will be located in Kabaale Parish, Buseruka Sub-County, Hoima District, and is commonly referred to as Kabaale Industrial Park (KIP).
The Refinery is the anchor project for and will be located within the KIP. The KIP will also accommodate Uganda’s second international airport, the crude oil export hub, as well as various industries for polymer and fertilizer production, warehousing and logistics, and agro-processors. Other services will include common facilities and services including workers’ housing, camps, schools, recreation areas and medical facilities, among other social- economic facilities.
The Government is developing a Refinery with an input capacity of 60,000 barrels per day. The Refinery configuration and complexity determines which products can be produced from the crude oil. The confirmed configuration for Uganda’s refinery is a Residual Fluidised Catalytic Cracker, that can produce Liquefied Petroleum Gas (LPG), diesel, petrol, kerosene, jet fuel and Heavy Fuel Oil (HFO).
The refinery is owned under a Private Public partnership (PPP) arrangement between GoU(represented by UNOC) and a private developer, (Albertine Graben Energy Consortium (AGEC). The AGEC comprises of Nuovo Pignone International srl a Baker Hughes Company, Yaatra Africa, Lionworks Group Limited and SAIPEM SPA. The AGEC signed a Project Framework Agreement (PFA) with Government of Uganda in 2018. The PFA set terms and milestones for the implementation of the project development in Uganda. Since the signing of the agreement a number of Key Milestones have been achieved including agreeing on the final refinery configuration and completion of the Final Front End Engineering Design (FEED) for the project. The Final FEED was submitted by AGEC, reviewed, and approved by Government. The Government and the AGEC are currently negotiating key commercial agreements that will pave way for the project Final Investment Decision (FID).
The Uganda Refinery project includes construction of a 211km multi-products pipeline from the Refinery in Hoima to a storage and distribution terminal that will be developed in Namwambula in Mpigi district to distribute the refined products. The downstream oil marketing and distribution companies shall be drawing from the storage terminal. The terminal will be managed by UNOC. The refined products pipeline will pass through Hoima, Kikuube, Kyankwanzi, Kiboga, Wakiso, and Mpigi districts.
The East African Crude Oil Pipeline (EACOP) is a 1,443km crude oil export infrastructure that will transport Uganda’s crude oil from Kabaale in Hoima district to Chongoleani peninsula near Tanga in Tanzania, for export to the international market.
Uganda’s crude oil is viscous, waxy and solidifies at room temperature. To transport this oil, therefore, the crude oil pipelines will be heated at a minimum temperature of 50°Celcius and insulated, in order to keep the crude oil in a liquid state. To maintain this operating temperature, the pipeline will be electrically heated along the entire route. The EACOP will be the longest, buried, electrically heated pipeline in the world, once completed.
The ESIA recognises the potential impacts/ risks from release of gases, exhaust fumes, dust and vapours to atmosphere. Some of the mitigation measures will include: Management of dust and equipment; Combustion equipment will be designed to meet national regulations and project standards regarding air quality. Vehicles, machines and equipment will be maintained regularly in accordance with the manufacturer’s recommendations to maximise fuel efficiency and help reduce emissions. Vehicles or equipment seen to be emitting excessive black smoke will not be permitted to continue work. The project will also provide for progressive vegetation and habitat restoration as part of efforts to curb emissions.
The pipelines will be and insulated to ensure no damage is done to the surrounding environment.
In Uganda, the EACOP will cover a distance of 296km, through ten (10) districts (Hoima, Kikuube, Kakumiro, Kyankwanzi, Mubende, Gomba, Sembabule, Lwengo, Kyotera and Rakai), and 25 sub-counties. In Tanzania, it will cover a distance of 1,147km, through eight(8) regions (Kagera, Geita, Shinyanga, Tabora, Singida, Dodoma, Manyara, Tanga) and 24 districts.
Once the Final Investment Decision (FID) is taken, the pipeline detail design and construction will start and will take 36 months to complete design and construction.
It is true that if not properly managed major infrastructure projects possess a considerable risk to people, communities and the environment as a result of the adverse impacts of the projects themselves. However, projects the world over are often preceded by Environment and Social Impact Assessments (ESIA) which address most of the be concerns.
EACOP has undergone one of the most rigorous ESIA processes based on the highest IFC standards which has been approved in line with those standards by NEMA. The studies leading to this approval were shared publicly as the process for this approval was being undertaken. This misinformation is therefore not based on any facts but a desire to curtail a very significant opportunity for development of the country and the region. Further third-party review of the different concerns raised is ongoing to ensure the projects meet all the best practice standards.
The complete list of critical oil roads is as follows:
- Masindi[Kisanja]-Park junction and Tangi (Pakwach) junction—Paraa— Buliisa and Wanseko—Bugungu Roads upgrading project (159km)
- Hoima-Butiaba-Wanseko Road: 111km traversing Hoima and Buliisa districts
- Masindi-Biiso: 54km, Masindi district
- Masindi-Bugungu via Murchison Falls National Park: 80km, Masindi district
- Hohwa-Nyairongo-Kyarushesha: 25km, Hoima district
- Wanseko-Bugungu: 23km, Buliisa district
- Buhimba-Nalweyo-Kakindu-Kakumiro- Mubende: 93km, traversing Mubende and Kibaale districts
- Lusalira-Nkonge-Sembabule: 97km, through Ssembabule, Mpigi and Masindi districts
- Bugungu-Buliisa: 29km, Buliisa district
- Kabale-Kiziramfumbi: 30km, Hoima district
- Tangi junction-Paraa (including Tangi
Gate and Emmi Bridges): 22km, Nwoya district
- Kabwoya-Buhuka: 43km, Hoima district
- Karugutu-Ntoroko (via Semiliki National Park): 55km, Fort Portal district
As of May 2023, the critical oil roads were at over 90% completion and on track for completion by end 2023 for all the five Contract Packages. As far as ensuring connectivity of the roads infrastructure in the oil region is concerned packages 1, 2 and 3 already usable. More information and maps can be got from the website of the Uganda National Roads Authority: www.unra.go.ug
Various Resettlement Action Plans (RAPs) are currently being implemented for land acquisition for the various projects.
- The acquisition of land for the KFDA is being taken forward through development and implementation of three (03) RAPs in a phased manner. The total land requirement for the KFDA is approximately 705 acres. The progress of the land acquisition for the Kingfisher Development project is at 100%.
- The total land requirement for the Tilenga Project is approximately 1,183 The land acquisition process includes developing and implementing five (05) RAPs in a phased manner. The land acquisition process for the Tilenga stands at 96% with 5,414 PAPS compensated out of 5523 fully compensated.
- The government has made considerable progress on the EACOP RAP. The total land take for the project is 2,740 acres, housing four (4) construction camps, heating stations and the pipeline right of way (ROW). As of 31st April, 3,062 PAPs (84%) out of the total number of 3,648 PAPs (Ugandan section) had signed compensation agreements and 2,701 PAPs (74%) had been paid fully. In terms of resettling the physically displaced PAPs, forty-three (43) resettlement houses have been handed over to the PAPs while 134 are still under construction.
A cut-off date is announced after assessment of affected land and property. A cut-off date is essential for any project to progress from assessment to actual compensation.
The PAPs are only required to vacate project land following receipt of full compensation for said land and are given a notice period of three months. The delay between cut-off date and payment of compensation, occasioned by the COVID-19 pandemic and other challenges such as absentee landlords are regrettable; however, the compensation processes resumed and are being fast-tracked. The PAPs will be paid a statutory and other disturbance allowances, and, in addition, several livelihood restoration programmes. Other grievances that may arise are addressed through the grievance handling procedure that is documented in the RAP study report, with the involvement of the district and local community leaders and affected parties.
Some of the land required by the oil and gas projects is located in protected areas like national parks and wildlife reserves, as well as in wetlands, close to water bodies, around security installations, and along national roads and power lines.
In these cases, MEMD will enter an arrangement with the relevant Government Ministries, Departments and Agencies (MDAs) that include the Uganda Wildlife Authority (UWA), National Forestry Authority (NFA), National Environment Management Authority (NEMA), Uganda National Roads Authority (UNRA), Uganda Electricity Transmission Company Limited (UETCL) and the Ministry of Defence and Veteran Affairs (MDVA), in order to secure the land for the oil and gas projects.
The companies are acquiring the land on behalf of the Government. When all activities are completed, the companies will decommission the facilities and restore the land and hand it over to the Ministry of Energy and Mineral Development, on behalf of Government. Land previously owned or used by other Government MDAs will revert to the respective entities.
Acquisition and/or use of land for petroleum operations is in respect of the rights of the landowners and obligations provided for in the country’s laws. Compensation rates for crops, trees and other non-permanent property are determined by the district land board and approved by the Chief Government Valuer in the Ministry of Lands, Housing and Urban Development. These rates are reviewed to ensure equity and that they are in line with prevailing market prices.
Land is valued based on the market rates as provided for in Section 77 of the Land Act Cap.227 and international valuation practices. The value is assessed by professional valuers after conducting a survey to establish the prevailing market price for land in a given locality using a comparative method. These rates are verified and approved by the Chief Government Valuer.
Continuous sensitisation and training of communities is being undertaken to ensure awareness of their rights and responsibilities and to enable them guard against speculators and land grabbing.
The payment of compensation packages for Refinery Project Affected Persons (PAPs) commenced in December 2013 and by December 2016, 98% of PAPs who opted for cash compensation had received their payments. The remaining 2% consist of PAPs who have not shown up or have rejected the rates. Resettlement houses for those who opted for relocation were constructed and handed over to the PAPs in 2017. The resettlement area in Kyakaboga, Hoima district also provides for social amenities such as schools and health centres, community and markets centers, and livelihood restoration programmes are currently being implemented as part of the resettlement process.
No one is “pushed” off their land before compensation is done. There are few hold outs in Buliisa who chose not to agree with the compensation terms for their land for the Tilenga Project. In order to avoid delays on the project, government compulsorily acquired their land, but their payments were effected into an escrow account overseen by the courts of law, and this was communicated to them. There have been some delays registered in line with payment of compensation in Buliisa and along the EACOP route. This was due to some administrative challenges and the disruption by the Covid 19 pandemic. This has since been addressed and disclosure plus signing of compensation agreements is ongoing. Also, the opening of bank accounts to facilitate the payment processes. There will be consideration for all those disturbed with an up lift (15% per annum) covering entire period of disturbance and 30% disturbance allowance. All these shall be paid on top of the compensation value that was defined by the GCV.
Government revenues from oil and gas include royalties, profit oil share, state participation and taxes. These revenues are expected to increase over the years as the company’s recoverable costs reduce.
The Production Sharing Agreements (PSAs) signed between Governments and the Oil companies provide for the sharing of petroleum during production. The International Oil Company (IOC) invests capital to explore and develop the resources. When production of oil starts, Government first receives a royalty payment of between 5% to 12.5% depending on the level of production. Then, the next deduction goes to recovery of the oil company’s costs, which is capped at 60% to 70% of the remaining ‘oil’ after royalty deduction. The next payment is considered as profit oil, which is shared between the Company and Government as per the PSAs. Government also receives corporate tax (approx. 30%) on the oil company’s share of profit oil. Government’s total take from the upstream, as per the current PSAs, therefore, ranges from between 65% to 80%, it increases over the years, given that there will be less costs to recover.
The overall projected annual revenues from the sector are estimated at US$1.5bn to US$ 2bn. Besides the revenues, the expected investments of US$15bn over the next four (04) years when construction of the infrastructure will take place, is an immense opportunity for the country through the provision of the required goods and services. In addition, the oil and gas sector will have a positive economic impact on other growth sectors of the economy such as manufacturing, tourism, agriculture, health, among others. It is projected that these linkages will increase Uganda’s revenue/ GDP by US$ 8.4 billion before first oil.
The PSAs stipulate that the financing risk for petroleum operations is borne by the oil companies. When commercial production starts, the company receives a proportion of oil/ gas production for the recovery of their costs and a share of the profits. The PSAs set out the criterion under which these costs are determined basing on the annual work programmes and budgets undertaken by the oil companies. These work programmes and budgets are presented to the Advisory Committee comprised of representatives of Government and the Oil Companies for consideration and approval. The Auditor General audits the annual books of account of the oil companies and indicates approval of the recoverable costs for petroleum activities for the period under review.
Uganda’s National Development Plan three (03) prioritizes investment in five (05) areas with the greatest multiplier effect on the economy; which are-: Agriculture; Tourism; Minerals, Oil, and gas; Infrastructure development; and Human capital development. In addition, the PAU is working closely with the different MDAs of Government, the licensed oil companies and the country’s private sector to define the potential linkages between the oil and gas sector and the other sectors of the economy. Optimal development of these linkages could generate up to US$8billion for the country during the four-five years of the development phase. The key sectors which the PAU has begun to work with in establishing these linkages include the health, agriculture, land use planning, tourism, engineering together with transport and construction sectors.
The Public Finance Management Act 2015, Part VIII Section 55-75 provides for among others, the management of revenues received from petroleum resources, specifically how these revenues will be monitored, invested, audited and dispersed to support development. The Act also provides for sharing of revenues between Central Government, Local Governments and Cultural Institutions. Local Governments will receive 6% of royalties and cultural institutions will receive 1% of royalties.
Before commencement of any activity, a comprehensive Environment and Social Impact Assessments (ESIA) is undertaken to identify the social and environmental impacts of a project as well as the measures to reduce the impacts and maximize the benefits.
ESIAs are undertaken by the IOCs in consultation with the PAU, National Environment Management Authority (NEMA) and local communities. The ESIA public hearings for the Tilenga and Kingfisher projects were held in November 2018 and June 2019, while those for the East Africa Crude Oil Pipeline were held in October 2019 in Kakumiro, Mubende and Rakai districts.
All the projects have received ESIA certification from the NEMA. The Tilenga Development Project ESIA was approved in April 2019, Kingfisher Project in March 2020 while the EACOP ESIA was approved in November 2019 (Tanzania section) and November 2020 (Uganda section).
As highlighted earlier, the PAU also monitors activities in the field to ensure compliance and reduce the risk of any potential negative impacts on the environment.
Waste produced from drilling operations is mainly composed of mud cuttings which are a mixture of rock cuttings and drilling fluid that contains additives like bentonite and barite which are used in the drilling process. In Uganda, Water Based Mud (WBM) has been used most often because it is more environmentally friendly than Oil Based Mud (OBM).
During the exploration phase, waste generated from the well sites was stored at designated consolidation sites where the waste was containerised and monitored. So far, no accidents have been reported regarding waste generated from various exploration and production activities, as well as base camps.
As of January 2023, NEMA had licensed EnviroServ and National Enterprise Company (NEC) to handle waste at different levels namely, transportation, treatment, and disposal. Previous containerised waste has been transferred to EnviroServ for treatment and disposal. In addition, the requisite legislation for waste management has been updated.
Produced water will be treated and reinjected back into the reservoirs for pressure support and ensure reservoir void age replacement. Produced water reinjection presents environmental benefits as it shall significantly reduce treated water volumes that have to be disposed into the environment and reduce the water volumes that must be abstracted from the lake to sustain reservoir pressure.
Waste that cannot be used as produced water shall be collected and hauled off site by licensed waste management contractors, for treatment at licensed waste management facilities using wastewater treatment technologies including, ultra-filtration and reverse osmosis to meet national permissible wastewater discharge standards before its discharged into the environment or used for dust suppression.
The National Environment Act, No. 5 of 2019 mandates the Office of the Prime Minister (OPM), together with the National Environment Management Authority (NEMA), and the Petroleum Authority of Uganda (PAU) as the Competent National Authority (CAN), to develop a National Oil Spill Contingency Plan (NOSCP). The NOSCP was developed, approved by the Prime Minister in February 2021 and officially launched in March 2022. In addition, the National Environment (oil spill prevention, preparedness, and response) Regulations, 2020 have been developed. The regulations and the NOSCP require local governments and other lead agencies to develop their own oil spill contingency plans.
The National Environment (Oil Spill Prevention, Preparedness and Response) Regulations, 2020 require the licensees to establish an oil spill preparedness and response system based on the tier structure (Tier 1, 2 and 3). The licensees and operators are responsible for Tier 1, Tier 2 and Tier 3 preparedness and response and are required to have sufficient resources to handle the related oil spills. Each facility would have to conduct an environmental risk assessment and oil spill contingency analysis of their operations and design their response plan accordingly. With particular reference to Tier 2 and Tier 3 oil spill response, however, licensees and operators may request for cooperation from other licensees and operators. They may also request for additional response resources from local governments and the Government. In specific circumstances, Government may consider taking over response operations in accordance with the National Environment (Oil Spill Prevention, Preparedness and Response) Regulations, 2020.
Currently, the licensees have relatively some oil spill response equipment that had been put in place in the event of an oil spill during the during the exploration phase. Such equipment includes; booms, water horses and water pumps, oil skimmers, oil absorbent pads, vacuum pumps, shore sealing booms, rotary brushes among others. However, for development phase, more equipment will have to be put in place. Studies are already taking place to inform the type of equipment that may be necessary.
The PAU being the CNA for the implementation of the NOSCP in collaboration with the OPM and NEMA, has developed a roadmap to kick start the implementation of the NOSCP. The Road map includes the need to support District Local Governments in the Albertine Region including Buliisa District and key lead agencies in the development of their oil Spill contingency plans. Stakeholder engagements on the same are scheduled to commence before close of the year 2021
- Physical environment impacts related to the non-living environment, including air quality and climate; noise and vibration; geology and soils, hydrogeology; surface water; landscape and visual, and waste.
- Ecological/ biodiversity impacts related to relevant sensitive receptors within the Project’s Area of
- Social impacts related to people,communities, and livelihoods (including socioeconomics; health and safety; archaeology and cultural heritage; and ecosystem services).
- Unplanned events, activities that are not expected to occur during the Project’s normal activities, such as emergencies, accidents, and incidents.
- Potential Cumulative effects, effects of the project together with other developments within the project’s area of influence
- Potential transboundary impacts: those that could extend to neighbouring countries, but are not global in nature
These impacts were adequately assessed and evaluated, and appropriate mitigation measures were identified and proposed to minimize such impacts. The selection of mitigation measures considered the standard mitigation hierarchy, whereby preference was given to avoiding impacts altogether and subsequently to minimising the impact, repairing its effects, and/ or offsetting the impact through actions in other areas.
In addition, the project Front-End Engineering Design incorporated embedded mitigation measures into the designs of the Project to further reduce the impacts associated with the Project.
The project has also developed and is implementing an Environment and Social Management Plan (ESMP). The ESMP outlines the project phases, activity potential impact description, mitigation and enhancement measures, monitoring mechanisms, performance indicators and associated costs. It further designates the roles and responsibilities of the different entities that shall be involved in implementation of mitigation measures and monitoring.
Numerous baseline studies have been undertaken and continue to be undertaken to collect pre project data on metrics (social economic, wildlife, air, and waste quality) that shall continue to be monitored during project implementation over the years. The metrics shall be used to evaluate any changes resulting from the project and the effectiveness of suggested mitigation measures.
The Environment and Social Assessment (ESIA) studies for Tilenga and Kingfisher Development Projects identified a number of impacts of drilling operations to wildlife including disturbance, loss of habitat and oiled wildlife resulting from oil spills. Several wildlife studies were therefore undertaken to inform feasible and practicable mitigation measures such as optimization of the project footprint, use of the best available technologies and application of the mitigation hierarchy in accordance with the national environment laws and international best practices.
In order to ascertain whether or not the above measures will be effective, species-specific surveys, some of which involve placing of satellite radio collars on the selected flagship wildlife species to monitor their population dynamics, ranging patterns and habitat utilization are currently being undertaken prior to drilling activities. These studies will continue throughout the drilling campaign and shall be used to as a benchmark for detecting any variations in the ranging patterns of the selected species. These will further inform implementation of appropriate mitigation measures.
The species currently being monitored include, lions, elephants, Nubian giraffe, Kobus Kob (Uganda kob) hyena, vultures, hartebeest, grey crown crane and chimpanzee.
There is enhanced level of biodiversity surveillance in the Albertine Graben because of oil and gas activities particularly on population dynamics, poaching activities, land cover and habitat management. The surveillance is being facilitated by improved technologies and software such as satellite telemetry, aerial census, SMART® software and construction of more ranger outposts. Surveillance is imperative in understanding underlying facts about drivers of change that can potentially affect conservation in the area and inform the development of outcome-based conservation actions.
- Where feasible, the light will be directed inwards the facilities and will be of a warm / neutral colour so as to limit nuisance and to avoid attracting
- Use of colours that match the surroundings for the infrastructure and This includes a blend of subtle light browns, pastel greens, rust, and greys
- Selecting appropriate material / colour- finishes to infrastructure to reduce glare and visibility
- The edges of the well pads will be bunded and planted with naturalistic native vegetation to provide screening of infrastructure
In Uganda, the EACOP avoided all protected areas including national parks and protected forests with exception at Taala Forest Reserve where the pipeline traverses 4.5 km along the western part of the forest in Gayaza Subcounty, Kyankwanzi District. The natural vegetation within the forest reserve only persists in the wet valleys, having been replaced by plantations of eucalyptus and pine, and seasonal crops.
The high dust levels are a result of very strong winds coupled with a prolonged dry spell within Buliisa District and the surrounding areas. This situation is not only affecting the Tilenga Project Industrial site area but a wider landscape within Buliisa District. To deal with this challenge, the frequency of water spraying has been increased to suppress the dust generated. In addition, site activities that generate high dust levels have been scaled down. Therefore, the situation being witnessed is largely temporary and is worsened by natural factors beyond reasonable control by the Project. The situation shall normalise once the dry spell and strong winds ease.
The affected communities/villages have been prone to flush flooding as evidenced by historical satellite imagery. However, the surface runoffs from the Tilenga project facilities especially the Industrial area and some well pads may have increased water logging, especially during the rainy seasons.
Surface runoffs generated by the heavy downpour damaged some assets and crops such as watermelon, grafted mangoes, jackfruit, neem trees and moringa among others. The floods have also caused the temporary displacement of some affected households.
An assessment and valuation of affected assets to inform appropriate compensation packages has been undertaken. As of April 2023, compensation for affected PAPs from the Industrial area and Batching plant stood at 50/66 (75.8%). Disclosure and agreement signing for 24 PAPs on Gunya1 were completed in November 2022, and payment is underway.
Various short-term measures to minimize the surface run-off from the facilities to the communities have been implemented. Key ones include:
- Pumping water to other areas in the industrial area to minimize the flow to the
- Occasional use of bowsers to transport water from flooded areas to other areas where it can be used for construction and dust
These temporary measures have been considered effective given that no similar incidents have been reported since the last episode in August 2022.
For a long-term solution, a hydrological and flood modelling study to inform the development of a detailed design of a suitable retention pond system and robust flood management plan to cover the lifespan of the project is underway.
The existing short-term and proposed permanent measures are expected to provide a robust solution to managing flooding and surface run-offs in the area. However, the effectiveness of the proposed interventions vis-à-vis the magnitude of the problem will be periodically reviewed to determine if the acquisition of additional land beyond the ten- acre buffer zone is required.
Hard copies can also be accessed in various public libraries including at the National Environment Management Authority Library, Uganda National Library, Makerere University Library, and Kyambogo University Library.
The PAU is conscious of the fact that very many resource rich countries in Africa have remained poor despite the existence of natural resources. Government has therefore developed a robust policy, legal, regulatory and institutional framework that addresses the potential negative environmental, social and economic impacts of petroleum exploration, production and transmission in Uganda. In addition, capacity has been built both within and outside Government to ensure strict monitoring and accountability. All stakeholders must play their respective roles to ensure effective and efficient development and management of the oil and gas sector in Uganda.
The US Energy Information Administration (EIA) estimates that global energy demand will increase by 50% by 2050 and most of this increase in demand will come from non-OECD (Organisation for Economic Co-operation and Development) countries. EIA also asserts that in order to achieve net zero emissions by 2050, primary energy demand needs to fall by 17% between 2019 and 2030, to a level similar to 2006, even though the global economy is twice as large. Africa, and the developing world, historically (and presently) have the lowest emissions. The World Economic Forum, projections are that, for instance, a three-times increase in use of Natural gas to meet energy (electricity) needs in Sub-Saharan Africa would only increase carbon emissions by only 1% of global emissions.
With fossils fuels still taking up 84% of the worlds’ energy mix, and the universal use of the clean energy sources still in its infancy, it is clear that upon commencement of production in 2025, Uganda’s oil will have a ready market for a period of at least 40 years. This is backed by the fact that there is a large part of this market that lies within the developing world whose reliance on fossil fuels cannot be easily replaced by the onerous green technologies.
Uganda is party to United Nations Framework Convention on Climate Change (UNFCCC), Kyoto protocol and the Paris Agreement, an affirmation of Uganda’s commitment towards the global efforts to manage climate change through controlling emission of Green House Gases (GHGs) and putting in place mitigation and adaptation mechanisms to climate change. In order to domesticate and give force of law to these international frameworks, Uganda developed the National Climate Change Act, 2021, which requires the operators/ licensees in the oil and gas sector to undertake national inventory for the targeted GHGs in fulfilment of the requirements under the Climate Change Bill. The PAU as a key regulator for the sector will ensure that this is undertaken.
The main objective of the country for national content in the oil and gas sector is to achieve in-country value creation and retention whilst ensuring competitiveness, efficiency and effectiveness. This will be achieved through participation of Ugandans in; employment, utilisation of Ugandan goods and services, enterprise development, human capacity development and technology transfer among others.
There are both technical and non-technical employment opportunities in the oil and gas sector. The job opportunities in these two categories include qualified Geoscientists, Engineers, Economists, Accountants, Lawyers and Social Workers among others. These opportunities are advertised in the media and are competed for.
There are also unskilled jobs in the operations areas in the Albertine Graben. These are offered through consultations with the community leaders: Districts and Local Councils. It should be noted, however, that the oil and gas sector is not a mass employer but offers opportunities in service provision and spill over benefits through other sectors such as transportation, hospitality, construction, catering, clearing, and forwarding, ICT, and waste management, among others. The PAU developed a National Oil and Gas Talent Register to capture all talent that can potentially work in the oil and gas sector as required by law.
The NOGTR is a register classified into the demand and supply side users. The demand side users consist of companies/ government agencies which meet the eligibility criteria seeking to recruit human resource across projects in the oil and gas sector and redeployment of the same to other sectors.
On the other hand, the supply side users include individuals who meet the eligibility criteria for the workforce demands of the oil and gas and are likely to be recruited by the demand side users.
The Authority reviews and approves the organizational structures of the companies with a view of ensuring that priority is given to employment of Ugandans especially in positions where capacity is available. For all positions whose capacity is not available locally, a succession plan is agreed upon with clear durations and training plans to enable Ugandans take up the roles eventually. This is followed by a thorough evaluation of requests for recommendations for issuance of work permits. The Ministry of Internal affairs issues work permits for foreigners on recommendation from the PAU, after an advert is run to ensure qualified Ugandans are given opportunity/ priority for employment.
Different categories of Jobs require varied levels of experience ranging from 3 years to 10 years. The PAU regulates industry players and therefore needs to employ staff with the required experience and qualifications. The PAU and industry players also offer graduate trainee positions and internship placements for new graduates to enable them acquire experience and become competitive in the job market.
The oil companies are required to hold quarterly stakeholder engagements through which information regarding major requirements and standards in the oil and gas Sector is disseminated. These are key in enabling an understanding of the sector and preparation for the opportunities.
Government is planning to establish an Industry Enhancement centre (IEC). This will be useful in raising the standards (e.g. Health and safety, international business operations) of businesses and entrepreneurs to improve their competitiveness in the Sector, it will also compliment the efforts established by other private entities like the Stanbic Bank incubator. This is one of the areas that require Government financing to support increased in-country value addition.
Local companies are encouraged to join hands with other local companies, form consortiums, and build their portfolio to be able to compete for big contracts to supply the large quantities of goods and services needed in the oil and gas industry. The PAU also emphasises to local companies that they can still benefit from sub- contracts, which is where majority of the goods and services supply opportunities lie.
As of November 2021, employment of Ugandans by CNOOC Uganda and TotalEnergies E&P Uganda stood at 81% and 77% respectively. The Ugandans employed by the IOCs do earn regular income and make significant contribution to the economy via payment of taxes (like Pay As You Earn) and other taxes through consumption of goods and services.
The quality of employment of Ugandans in the sector has also gradually improved, with more Ugandans occupying managerial and supervisory positions.
In terms of indirect employment, 2,298 Ugandans are indirectly employed in the sector through various contractors and sub- contractors. Of these, 1,539 (67%) are skilled labourers, 483 (21%) are semi-skilled and 252 (11%) are basic skilled personnel.
Expatriate employment in the Oil and Gas Sector is a global practice. However, the PAU has established an evaluation criterion of expatriates before they are deployed in Uganda. This criterion requires a demonstration of one’s competence/ qualification, related experience and a clear plan for training of Ugandans for possible replacement. A clear plan for succession of the expatriate is discussed and agreed for each of the expatriate positions. This is further monitored to ensure knowledge transfer and actual replacement at the expiry of the agreed timeline.
The overall manpower needs for the industry in view of the planned development is segmented under the direct, indirect and induced aspects. The direct resources include highly specialized expertise in technical fields mainly and this will require about 14,000 people. The second one is the indirect cohort, and it involves mainly support functions in management and service provision, and it will need about 42,700 people. The last one is the induced cohort including the service industry like hotels, restaurants, accommodation (for offices and people), and transport among others. This cohort shall require about 105,000 people. The overall total manpower projection is 161,700 people. Besides these, there are additional jobs prioritized sectors over 10 years. These will include 1,810 Engineers and Managers; 4,836 Technicians; 11,059 trades and crafts; and 11,059 unskilled and entry level resources. The overall total is 29,256 job openings. The PAU is keen to have as much national content consideration as possible so the industry can greatly contribute to delivery of lasting value to Ugandans (and the economy). It should be noted that there is no compromise on quality and all those employed are provided adequate capacity through training and hands- on experience.
The Authority reviews and approves the training plans of the Oil companies and progress is monitored periodically to ensure effective implementation. The companies also support training of Ugandan employees through industry attachments to their operations in the different parts of the world. This has improved the management and technical capacity of the officers to execute petroleum operations.
In addition, the PAU in collaboration with the Ministry of Education and Sports established a network of skills development providers that dialogue on a quarterly basis regarding the skills supply, demand, the required interventions and propose alternatives on how to deal with the challenges.
On a broader level, Government established a Petroleum Institute in Kigumba to support the delivery of the required technicians in the Sector. There are other Government vocational training institutions that are offering training programmes relevant for the oil and gas sector and these institutions are so far underutilised. These include: Buhimba Vocational Training Institute (VTI), Kiryandongo VTI among others. Bachelor’s and master’s degree programmes where established at Makerere University to support professional training that is relevant to the sector needs. There are also private training providers that are undertaking various short term and long-term training programmes. These include: The Training and Assessment Centre (TASC), SEAOWL training centre, Institute of Petroleum Studies, Kampala (IPSK) and SunMaker Energy Uganda.
On an annual basis, the PAU reviews and approves the procurement plans of the licensed oil companies to identify opportunities for Ugandan enterprises. As a result, oil companies use local contractors in areas such as construction, civil works, ICT, camp management, clearing and forwarding, heavy lifting, road works, and supply of food stuffs, among others. Gradually, Ugandan companies have moved into supply of technical services to the industry in collaboration with experienced international Companies. These services include geological and geophysical studies and seismic data acquisition services.
Out of a cumulative investment of US$ 3.318 billion in the sector during exploration (2008 – June 2017), 26% (US$ 873 million) was contracted to over 1,000 Ugandan enterprises to provide services such as logistics, civil works, environment consulting services, catering and hotel accommodation (Figures 5 and 6). Other services included cleaning and fumigation services, transportation, communication, medical services suppliers, security, clearing and forwarding and human resource management, among others.
As the PAU, we encourage local companies to join hands with other local companies, form consortiums, and build their portfolio to be able to compete for big contracts to supply the large quantities of goods and services needed in the oil and gas industry. The PAU also emphasises to local companies that they can still benefit from sub-contracts, which is where majority of the goods and services supply opportunities lie.
- Open https://www.pau.go.ug
- Click National Content
- Click National Supplier Database
- Click register here
- Create a profile and check for the password in your inbox
- Login using the credentials
- Read through the guidelines from top to bottom
- Click Form 1 -NEW APPLICANTS REGISTRATION on upper right-hand top corner
- Download the PDF on how to access the National Supplier Database for more details
- Certificate of Incorporation
- Certificate of Registration where applicable
- Valid Tax Clearance Certificate or proof of exemption where applicable
- Social Security Certificate or proof of exemption where applicable
- Bank Reference Letter
- Certified Information on shareholding/directors of your Entity
- Copy of the National ID or Passport
- The Police letter
- Bank Reference Letter
- Professional certifications and Qualification
- Proof of Membership of professional bodies where applicable
The oil companies are required to hold quarterly stakeholder engagements through which information regarding major requirements and investment opportunities in the oil and gas Sector is disseminated. These are key in enabling an understanding of the sector and preparation for the opportunities.
Going forward the Government is planning to establish an Industry Enhancement centre (IEC). This will be useful in raising the standards (e.g., Health and safety, international business operations) of businesses and entrepreneurs to improve their competitiveness in the Sector, it will also compliment the efforts established by other private entities like the Stanbic Bank incubator. This is one of the areas that require Government financing to support increased in- country value addition.
The government plans to operationalize a national content development fund, which was approved by Cabinet in 2020, as one of the ways of providing affordable credit to Ugandan enterprises in the oil and gas sector. This is one of the ways prospective investors in the sector shall be supported so that they can manage to favourably compete for opportunities in the sector. In the meantime, local companies are encouraged to take advantage of the government programmes like the Uganda Development Bank (UDB) capital financing for local businesses; “Emyooga”/Micro-Finance Support Centre funding for Micro, Small and Medium Enterprises (MSMEs).
The support to the agriculture sector was prioritised to ensure adequate food supply to the 160,000 workers expected during the peak of the Petroleum activities. This will be achieved through the Agriculture Development Project (ADP) that is being designed in collaboration with Ministry of Agriculture, the main objective of the project is to support implementation of immediate needs of the field activities.
In addition, PAU is working with the key stakeholders in the tourism, education, health, works and housing sectors to take advantage of the opportunities being created by the oil and gas sector in these respective areas.
The standard practice for Corporate Social Responsibility (CSR) is that CSR projects are targeted for the communities near the areas of operations. The respective companies operating in the areas also have and follow internal corporate policies that guide their participation in CSR projects. The PAU does not dictate or recommend CSR projects, and the costs incurred by the companies are not recoverable.
Uganda has set a target of achieving between 30% to 40% local content during the development phase, which is expected to bring in investment of US$ 15 billion. According to reports, the average local content value attained between 2017 to 2020 was 37% and is expected to get better in the subsequent years. This excludes other indirect and induced benefits to other sectors of the economy.
The PAU can engage the Companies on behalf of the communities concerning the relevance and impact of CSR projects. However, there is a limit to what oil companies can contribute. Community leaders should not expect the Companies to address all their needs. The PAU instead encourages leaders to additionally engage the Central Government and other strategic partners.
CSR activities by the oil companies and contractors are normally done to benefit impacted communities by operations. What the rest of the country benefits from are the revenues and other payments made to the government and the latter uses such resources to cater for public goods and services to the entire country.
The PAU has robust strategies for communication and engagement with stakeholders on regular and continuous basis. Key engagement and information sharing channels include: social media (Facebook, Twitter, LinkedIn etc), quarterly engagements at national and local levels, TV and radio programmes, Weekly New Vision journal, meetings with project affected persons, and public hearings among others. Hundreds of thousands of people (stakeholders are engaged on regular basis (quarterly, monthly, daily) and provided with information on oil and gas developments in Uganda. More efforts shall be put in to ensure increased communication
and information sharing with all stakeholders.
The Multi Stakeholder Group (MSG) now has 18 months to publish information on the sector in a national report, and then submit to a ‘validation’ of these disclosures by the International EITI Board. The PAU is expected to facilitate disclosure of information relating to the PAU’s regulatory areas through its representatives.
As the monitor and regulator of the petroleum sector in Uganda, PAU is the custodian of all legal agreements signed and licenses allocated to companies that are operating in the sector. The PAU will disclose information to Uganda EITI’s MSG for public disclosure and publication on the PAU website and the UGEITI website.
The PAU will also be required to publicly disclose information on production once it commences, both on its website and on the UGEITI website.
The PAU will be required to lead on a number of activities in the Uganda National EITI work plan, as part of the process of preparing the Uganda National EITI report, due on 12th February 2022
The PAU, UNOC and the Joint Venture (JV) Partners do conduct quarterly engagements with the civil society (including Non-Governmental Organisations (NGOs)) to ensure continuous flow of information and transparency on all sector developments to mitigate hostility and ensure stakeholder Buy In. There are more efforts undertaken by individual government entities aimed at building and maintaining durable working relationships with Civil Society Organisations (CSOs/NGOs).
Oil and Gas Exploration in Uganda is currently taking place in the Albertine Graben (figure 1). The Graben is part of the East African Rift System and runs along Uganda’s western border with the Democratic Republic of Congo (DRC). The Graben is approximately 500 km long, averaging 45 km in width and 23,000 square kilometres in Uganda.
The Petroleum Value Chain is the series of activities staring from exploring for oil to consumption of petroleum products. The Petroleum Value Chain has three major phases, namely; upstream, midstream, and downstream. Upstream covers exploration, development and production of petroleum together with decommissioning. Exploration refers to the search for petroleum accumulations and includes appraisal of the same to establish the extent (distribution) of the petroleum accumulation below the earth’s surface and the ease of flow of the petroleum from this accumulation. Development involves preparing for production by putting in place facilities and infrastructure for collection, transportation and processing of crude oil and gas. Production is the removal of petroleum from the accumulations below the earth’s surface to the surface, and preparing the petroleum for transportation and refining. Midstream includes bulk transportation of petroleum commodities (crude oil and natural gas) and products (gasoline, diesel, jet fuel, etc), refining of oil and conversion of gas. It also includes converting oil and gas into marketable products and chemicals. Downstream deals with distribution, marketing and sale of petroleum products. In some countries, downstream and midstream operations are considered together as downstream operations.
Uganda confirmed commercial petroleum resources in 2006. Efforts to find oil in Uganda started as far back as the 1920s. These efforts led to the identification of surface seepages of oil and drilling of shallow wells around these seepages before 1945. One deep exploration well (Waki-1) was also drilled near Butiaba, in Buliisa district during 1938. These initial efforts were not successful in establishing commercial deposits of petroleum in the country. Renewed and consistent exploration efforts commenced in the 1980s which culminated into confirmation of commercial petroleum resources in Uganda during 2006.
The estimate resources in the country have increased from 300 million barrels in 2006 to 2 billion and 3.5 billion barrels in 2010 and 2012 respectively. As at June 2016, the discovered resources in the country were estimated at 6.0 billion barrels of oil equivalent in place with about 1.4 billion barrels of these resources recoverable (1 barrel is equivalent to 159 litres). The area explored presently represents less than 40% of the total area with the potential for petroleum production in the Albertine Graben and only 12% is licensed. There is therefore potential for additional petroleum resources to be discovered in the country when additional exploration is undertaken.
Geological factors including the fact that oil in the subsurface is stored in rocks with pores (similar to water in a sponge) and within structures, makes it impossible to recover 100% of the resources. The amount of oil to be recovered depends on the properties of the rock such as how the pores within the rock are connected to one another, reservoir pressures and type of oil, among others. Globally, an average of 20 to 30 per cent of the oil in place is recovered economically using the available technologies. Enhanced Oil Recovery (EOR) methods are also often used to increase the amount of oil recovered from an oil field using different technologies to supplement the natural production. EOR is used to improve movement of oil in the oil field and the different methods of EOR include polymer flooding, gas injection, and steam flooding.
Twenty-one (21) oil and/or gas discoveries have been made in Uganda to date.
The oil companies currently licensed to explore, develop and produce petroleum in the country are; Total E&P Uganda BV., Tullow Uganda Operations Pty Ltd, Tullow Uganda Limited and China National Offshore Oil Corporation (CNOOC) Uganda Limited who are Joint Venture Partners, and Armour Energy Limited and Oranto Petroleum Limited whose licenses were issued during 2017.
Article 244 of the Constitution of Uganda vests the ownership and control of minerals and petroleum in the Government on behalf of the people. The Government therefore holds all resources in trust for the people of Uganda. The Constitution also empowers Parliament to make laws regulating the exploration and exploitation of minerals and petroleum. In this regard, Section 4 of the Petroleum (Exploration, Development and Production) Act 2013 vests petroleum resources in the Government on behalf of the people.
In Uganda, at a projected peak production rate of about 200,000 barrels of oil per day, it is estimated that the current discovered resources can last 20-30 years. The length of time that oil and gas resources last in any given country largely depends on the amount of discovered resources and the rate at which these resources are produced. This rate is determined by many factors, including technical, strategic and economic reasons. However, additional exploration and appraisal is expected to be undertaken in the country, and this could lead to additional resources being discovered in the country, hence prolonging this production period. It is important that these resources are produced gradually in an efficient manner and at an economic rate that will also provide a sustained benefit to the country.
The depth at which hydrocarbon deposits are found varies greatly around the world. Very shallow deposits of less than 30metres were found in the early days of exploration. Today, it is common to produce oil from more than 3,000 metres. In Uganda, petroleum has been encountered between 290 metres and 3,000metres in the discoveries that have been made in the Albertine Graben to date.
Different types of crude oil are produced around the world. Two of the most important quality characteristics of oil are its density and sulphur content. Density ranges from light to heavy, while sulphur content is characterized as sweet or sour. Crude oils that are light (with degrees of API gravity above 360) and sweet (low sulphur content) are usually priced higher than heavy, sour crude oils. Uganda’s crude oil has; API range of 17 degrees Celcius ~ 33 degrees Celcius, with a low sulphur content but is waxy with an average pour point of 40 degreesC and hence solidifies at room temperature. Uganda’s crude oil is therefore described as sweet and medium to heavy.
In accordance with section 66 of the PEDP Act 2013, when a discovery is made, the licensee is required to notify the Government and submit a technical evaluation. The licensed Oil Company appraises the discovery to determine the extent of the discovery and the characteristics of the crude oil therein by drilling additional wells (figure 5) and/or undertaking well testing. Following completion of appraisal and interpretation of the data acquired during appraisal, the company applies for a production licence and this application is supported by a Field Development Plan (FDP) which details how the company intends to produce and transport the petroleum in the discovery; and a Petroleum Reservoir Report (PRR) that describes the technical understanding of the reservoir below the surface. These reports are reviewed by Government and discussed with the company until agreement is reached and a production license is issued. The company then prepares the field for production by drilling injection and production wells and also putting in place other surface facilities for production and processing of crude oil.
The National Oil and Gas Policy, 2008 recommends value addition through refining. A Memorandum of Understanding (MoU) between Government and the Licensed Oil Companies which provides for a commercialization plan for the development of the discovered oil and gas resources in the country was concluded during February 2014. The MoU provides for the use of petroleum for power generation, supply of Crude Oil to the refinery to be developed in Uganda and export of Crude Oil through an export pipeline or any other viable options.
Commercial production can only commence following the issuance of a production license, which authorises the holder to produce petroleum from a field whose appraisal has been completed and development plan approved. Commercial production of petroleum also requires putting in place infrastructure such as processing plants to separate the crude from impurities like sand and water, pipelines for transportation of crude from the fields, a refinery to transform the crude into the various products such as Diesel, Petrol, and Kerosene and facilities for the export of crude oil. These and other infrastructure such as the road networks, water and electricity in the Albertine Graben are being upgraded to support these developments. Full scale production has been earmarked for end of 2020, after the necessary infrastructure has been put in place.
Natural gas can be “associated gas” (found within oil), or “non-associated/ free gas” (independent natural gas reservoir). Associated gas cannot exist without oil in the reservoir which doesn’t necessarily apply to free gas reservoirs. The associated gas established in the country to date is estimated at 170 billion cubic feet (bcf) while non-associated gas is estimated at 500bcf.
The gas resources are commercially viable and can be used for power generation. In addition, natural gas can be used for domestic purposes such as heating and cooking. It can also be used as fuel for vehicles, the production of iron and steel from iron ore, in fertilizer plants and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. Natural gas can also be re-injected into the reservoirs to maintain pressure to support production of crude oil through enhancement of oil recovery. Alternatively, after processing, gas can be used for on-site electricity generation or used as feedstock for different petrochemical industries. Another possibility is to export natural gas as a liquid. Gas-to-liquids (GTL) is a developing technology that converts natural gas into synthetic gasoline, diesel, or jet fuel.
Uganda’s commercialisation strategy is focused on valuable utilization of the discovered resources, as provided for in the National Oil and Gas Policy for Uganda. The agreed commercialization strategy for Uganda’s 6.5 billion barrels of in place petroleum resources (1.4 billion barrels are recoverable) includes; 1) use of crude oil and gas for power generation, which will involve utilisation of associated gas (gas produced with oil) to generate power to support field development and production operations; 2) Supply of Crude Oil to a 60,000 barrels per day refinery to be developed in Uganda to meet national and regional petroleum products requirements; and 3) export of Crude Oil through an export pipeline or any other viable options.
Objective 4 of the National Oil and Gas Policy (2008) for Uganda is to promote valuable utilisation of the country’s oil and gas resources through in-country refining of crude oil. In this regard therefore, Government undertook a feasibility study on in-country refining in 2010 and the study recommended that development of a refinery in Uganda was the most economic option for the utilisation of Uganda’s crude oil. The refinery will also ensure security of supply of petroleum products to Uganda. In addition the refinery will create jobs for Ugandans, promote industrialisation while saving foreign exchange which would have been used to import petroleum products. A crude export pipeline will provide an alternative outlet for produced oil to ensure return on investment for the licensees and Government. Studies on the crude export pipeline routing were conducted and the Hoima (Uganda) – Tanga (Tanzania) route was selected as more secure, at a cheaper cost and a lower tariff.
The feasibility study recommended Kabaale Parish in Buseruka Sub County, Hoima district as the most suitable location for the refinery. This is due to its centrality in relation to the entire Albertine Graben, proximity to the oil fields, sparse population and relatively flat terrain among others.
A refinery with an input capacity of 60,000 barrels per day, starting with a capacity of 30,000 barrels per day will be developed. The refinery configuration and complexity determines which products can be produced from the crude oil. The planned refinery is expected to produce Liquefied Petroleum Gas (LPG), diesel, petrol, kerosene, jet fuel and Heavy Fuel Oil (HFO).
Government has invited private sector participation in the development of the refinery. The refinery will be developed on a Public-Private partnership (PPP). Government embarked on a competitive process of selection of a lead investor to lead the construction and operation of the refinery. This culminated in the signing of a Project Framework Agreement with the Albertine Graben Refinery Consortium in April 2018 to lead the development of the Refinery. East African member states have been invited to participate in the development of the refinery by taking part of the public shares. The Uganda Refining Holding Company that will hold Government’s interest on behalf of the Uganda National Oil Company was incorporated as a subsidiary and recruitment of staff is ongoing, starting with the General Manager.
The Ministry of Energy and Mineral Development has acquired 29 sq.km of land for the refinery. This land will host a refinery complex, an airport, waste management facilities and petrochemical industries among others. As part of this process, Government undertook a Resettlement Action Plan (RAP) through a consultative process with the Project Affected Persons (PAPs) (figure 7) for the required land during 2012. The objective of the RAP was to develop a framework for managing the loss of economic activities and livelihoods through compensation and/ or relocation of the affected people. Following approval of the RAP, its implementation commenced in July 2013 with disclosure of compensation values to verified land, crop and property owners and training in financial management and livelihood improvement to enable the PAPs put to good use the compensation packages. Payment of compensation packages commenced in December 2013 and by December 2016, 98% of PAPs who opted for cash compensation had received their payments. The remaining 2% consist of PAPs who have not shown up or have rejected the rates. In addition, 533 acres of land was acquired in Kyakabooga Parish, Buseruka Subcounty for resettlement of the PAPs who opted for relocation and physical planning for this land has been completed. Construction of resettlement houses for those who opted for relocation was completed and handed over to the PAPs during 2017.
A National Oil and Gas Policy for Uganda was approved by Cabinet in 2008. As part of efforts to operationalize the Policy, new legislation for the oil and gas sector in Uganda has been developed. The Petroleum Exploration, Development and Production (PEDP) Act 2013; and the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013 became effective in April 2013 and July 2013 respectively. The former repealed the Petroleum Exploration and Production Act of 1985. In addition, the Ministry has developed regulations in line with the two Acts and these are; • The Petroleum (Exploration, Development and Production) Regulations 2016 • The Petroleum (Exploration, Development and Production) (Health, Safety and Environment) Regulations 2016 • The Petroleum (Exploration, Development and Production) (National Content) Regulations 2016 • The Petroleum (Exploration, Development and Production) (Metering) Regulations 2016 • The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Regulations 2016. • The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations, 2016. • The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (Health, Safety and Environment) Regulations, 2016. This is in addition to other sectoral laws, statutes and guidelines on Environment, Wildlife, Water, Income Tax, Land, among others
The National Oil and Gas Policy highlights the roles of the different Government institutions led by the Ministry of Energy and Mineral Development. In line with the policy three key separate institutions have been created with the following roles:- • The Directorate of Petroleum in the Ministry which is responsible for policy making; coordinating the development of the sector; and undertake licensing and national and capacity building among other roles. • The Petroleum Authority of Uganda (PAU) regulates the different players in the sector, including enforcing compliance and monitoring the operations of oil companies. • The Uganda National Oil Company (UNOC) as a separate commercial entity responsible for state participation in the licences and other related business aspects. The detailed roles of the Petroleum Authority and National Oil Company are provided in the PEDP Act 2013. The Boards of Directors for PAU and UNOC were inaugurated in October 2015, and recruitment of the Executive Director and the Chief Executive Officer respectively by the respective boards of directors together with staff was undertaken during 2016 and 2017. The UNOC and PAU are now operational.
Hard copies of the National Oil and Gas Policy for Uganda and the laws and regulations can be accessed from the Ministry of Energy and Mineral Development, and soft copies from both MEMD and PAU’s websites www.energyandminerals.go.ug and www.pau.go.ug respectively. As part of the implementation of the National Communication Strategy for the Oil and Gas Sector in Uganda, government has developed a popular/ simplified version of the policy which has been translated into eleven local languages, which can also be accessed as highlighted above.
The National Communication Strategy for the oil and gas sector in Uganda identifies communities in the Albertine Graben as one of the key audiences for oil and gas information since they host oil and gas operations and infrastructure for the developments. Information dissemination to communities is undertaken through Community consultations and sensitisation meetings before and during operations. Radio talk shows are carried out periodically to relay information to communities in areas of operation and across the country on topics of common interest. In addition, the Community Development Officers based at the district and community levels are being capacity built to also support the dissemination of information on the oil and gas sector to the communities. Local communities supply most of the unskilled labour required during implementation of oil and gas activities in their areas. The Oil Companies undertake Corporate Social Responsibility (CSR) initiatives to support service delivery in health (figure 8), education and enterprise development, among others in the communities where oil and gas activities are undertaken. The Ministry plans to set up regional offices to ensure easy accessibility for the communities.
The NOGP provides for efficiency in licensing through competitive bidding. The Petroleum (Exploration, Development and Production) Act, 2013 provides for licensing of areas with the potential for petroleum production in the country to be undertaken through open, transparent and competitive bidding. Less than 10% of the Albertine Graben is licensed. The first competitive licensing round for some of the areas which are currently not licensed was announced by the Minister for Energy and Mineral Development on 24th February 2015 and three new licenses were issued. The second competitive licensing round was announced in May 2019 and is still ongoing, covering 5 blocks in the Albertine Graben.
The Governments of Uganda and DRC (then Zaire) signed an agreement of cooperation in 1990, to allow for joint exploration and exploitation of resources across the border by either country. An addendum to the agreement was signed in 2007 to provide for how any fields falling across the border would be shared in line with the principle of unitization. This agreement allows establishment of the percentage of the field in each country and thereby determine each country’s share at the time of production. The two Governments have held discussions on the ongoing work in the Albertine Graben, exchange of technical data and visits to the Albertine Graben to understand the exploration work, among others. It is however important to note that the discoveries made in Uganda to date are not on the common border with DRC. The Governments of the two countries continue to have regular dialogue to ensure harmonious development of the resources on either side of the border.
Government revenues from oil and gas include royalties, profit oil share, state participation and taxes. These revenues are expected to increase over the years as the company’s recoverable costs reduce. The Production Sharing Agreements (PSAs) signed between Governments and the Oil companies provide for the sharing of petroleum during production. The International Oil Company (IOC) invests capital (along with the National Oil Company) in some cases. Investment costs are deducted from production revenues in the form of cost oil. The share of the revenues from the produced oil less cost oil is profit oil, which is shared between Government and the licensee. Government also receives other payments such as bonuses, royalties, duties, or taxes which are calculated on the basis of the amount of oil produced; Government and the IOC will share profit oil throughout the entire duration of production. Government also receives corporate tax on the IOC’s share of profit oil.
The Production Sharing Agreement (PSAs) provides that the financing risk for petroleum operations is borne by oil companies. When commercial production starts, the company receives a proportion of oil/gas production for the recovery of their costs and a share of the profits. The PSAs set out the criterion under which these costs are determined basing on the annual work programmes and budgets undertaken by the oil companies. These work programmes and budgets are presented to the Advisory Committee comprised of representatives of Government and the Oil Companies for consideration and approval. The Auditor General audits the annual books of account of the oil companies and indicates approval of the recoverable costs for petroleum activities for the period under review.
The Petroleum Authority of Uganda is required to monitor and regulate all operations of the oil companies. Prior to its creation, the Ministry of Energy and Mineral Development deployed on-site field monitors during all company operations to among other things ensure that the executed work programmes and budgets are in-line with those approved and follow-up to ensure that work is undertaken in line with the provisions of the Laws, PSAs and Regulations. The Companies submit daily reports regarding operations, including the costs for these operations. Other institutions such as NEMA and UWA also have field based monitors who work with the District Environment Officers and District Community Development Officers to monitor the Environmental, biodiversity and social aspects.
The goal of the National Oil and Gas Policy is to use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society. The Oil and Gas Revenue Management Policy emphasises the need for Petroleum revenues to be used to develop infrastructure and enhance the other productive sectors of the economy such as agriculture, tourism, manufacturing, education, among others. This will enable the benefits of oil revenues to be shared with the entire population and its impact is felt even after the resources are depleted. The Public Finance Management Act 2015, Part VIII Section 55-75 provides for among others, the management of revenues received from petroleum resources, specifically how these revenues will be monitored, invested, audited and dispersed to support development. The Act also provides for sharing of revenues between Central Government, Local Governments and Cultural Institutions. Local Governments will receive 6% of royalties and Cultural institutions will receive 1% of royalties.
Acquisition and/or use of land for petroleum operations is in respect of the rights of the land owners and obligations provided for in the country’s laws. Compensation rates for crops, trees and other non-permanent property are determined by the district land board and approved by the Chief Government Valuer in the Ministry of Lands, Housing and Urban Development. These rates are reviewed to ensure equity and that they are in line with prevailing market prices. Land is valued based on the market rates as provided for in Section 77 of the Land Act Cap.227 and international valuation practices. The value is assessed by professional valuers after conducting a survey to establish the prevailing market price for land in a given locality using a comparative method. These rates are verified and approved by the Chief Government Valuer. Continuous sensitization and training of communities is being undertaken to ensure awareness of their rights and responsibilities and to enable them guard against speculators and land grabbing.
The Albertine Graben was declared a special planning area during 2010 and emphasis has been put on physical planning of Municipalities and other towns in the region. Draft plans for Buliisa town council together (figure 11) with, Sebugoro in Hoima district and Butiaba in Buliisa district have been prepared and are under review. The Ministry of Lands, Housing and Urban Development (MLHUD) is has prepared physical development plans for the area around the refinery in Buseruka Subcounty, Hoima District. In addition, MLHUD has developed a Landuse plan for the entire Albertine Graben.
Frameworks to ensure harmonious existence between the environment and oil and gas operations are in place and are being implemented. These include: • Environment and Social Impact Assessments (ESIAs) which are undertaken in consultation with Government through National Environment Management Authority (NEMA) and the local communities. This ensures that any potential impacts – positive or negative – are considered and mitigation measures are put in place. • A multi-institutional monitoring team from NEMA, PEDPD, Uganda Wildlife Authority (UWA), National Forestry Authority (NFA), Directorate of Water Resources Management (DWRM), and Directorate of Fisheries Resources (DFR) together with the respective District Environment Officers continually monitor the activities. • Other frameworks developed to date include an Environmental Sensitivity Atlas for the AG, an Environment Monitoring Plan, and an Enforcement Strategy together with Guidelines for Waste management and Operations in protected areas. A Strategic Environment Assessment for oil and gas activities has also been developed to ensure that environmental concerns are included in all Government Plans, Programmes & Policies.
ESIAs are indeed public documents, and a copy of the final ESIA report is forwarded to the district through the District Environment Officer (DEO). It includes all comments and concerns raised and the responses given during consultations with stakeholders.
Waste produced from drilling operations is mainly composed of mud cuttings which are a mixture of rock cuttings and drilling fluid that contains additives like bentonite, barite which are used in the drilling process. In Uganda, Water Based Mud (WBM) has been used most often because it is more environmentally friendly than Oil Based Mud (OBM). During the exploration phase, waste generated from the well sites was stored at designated consolidation sites where the waste was containerized and monitored. So far, no accidents have been reported with regard to waste generated from various exploration and production activities, as well as base camps. NEMA has licensed twelve companies to handle waste at different levels namely; transportation, treatment and disposal. Enviroserv, White Nile Consultants Limited and Luwero Industries have constructed facilities in Hoima and Nakasongola respectively and are now licensed to operate these facilities. The previously containerized waste has been transferred to these facilities for treatment and disposal. In addition, the requisite legislation for waste management is being updated.
Oil spills undeniably present a risk in petroleum production processes across both developing and developed countries. In Uganda, oil spills present an additional risk given that Lake Albert is shared with Democratic Republic of Congo and also feeds the White Nile that flows to South Sudan and beyond. The rich biodiversity in the Albertine Graben presents another challenge. To this end, an Environment Risk Assessment (ERA) and Sensitivity Analysis for oil and gas operations in the Albertine Graben was undertaken. This informed the development of an Oil Spill Contingency Plan that was drafted with input from Office of the Prime Minister, NEMA, Ministry of Water and Environment, the Directorate of Petroleum and the Petroleum Authority of Uganda (PAU) among other agencies. The plan considers level of Preparedness, Emergency response mechanism, Command structure, Resources available and Mechanisms for handling oil spill.
The National Oil and Gas Policy recognises that the oil and gas sector can have a negative effect of oil and gas resource utilization leading to economic stagnation, environment degradation and increased poverty. Government of Uganda is conscious of the fact that very many resource rich countries in Africa have remained poor despite the existence of natural resources. Government has therefore developed a robust policy, legal, regulatory and institutional framework that addresses the potential negative environmental, social and economic impacts of petroleum exploration and production in Uganda. In addition, capacity has been build both within and outside Government to ensure strict monitoring and accountability. All stakeholders must play their respective roles to ensure effective and efficient development and management of the oil and gas sector in Uganda.
SEA is a new concept internationally which aims to evaluate the cumulative impacts of the oil and gas operations to ensure that these are captured in all Government Plans, Policies and Programs (PPP) across different sectors of the economy. The assessment indicated that there would be economic gains, albeit not without environmental and social challenges. For example, a large volume of waste would be generated with hazard potential to human beings, water bodies and animals. The assessment also indicated demographic changes in the region that would require planned social amenities like road networks, health facilities, and urban plans to avoid slums, among others. Some of the SEA recommendations under implementation include; development of a waste management plan and strategy to complement the laws that are already in place; State of the art waste management facilities have been constructed in the graben; the Ministry of Works and Transport together with Uganda National Roads Authority are upgrading the road networks in the Albertine Graben; plans to build an international airport are underway; Clean water infrastructure has been extended to region; and a police department to attend to oil and gas issues has been formed. In addition, the Ministry of Education and Sports has sanctioned a curriculum that attends to oil and gas by setting upgrading existing technical institutions to provide certifiable oil and gas training. The Ministry of Lands has developed has prepared a regional physical development plan for the entire Albertine Graben and planning for several growth centers in the region is ongoing.
There will be opportunities for employment and service provision. The Industrial Baseline Study estimates over 160,000 jobs to be created during the next phase of exploration and the development of the fields at Professional, Technical/ Artisan and Unskilled levels from direct, indirect and induced opportunities. The study also identifies 25 critical industries with high potential for National Content for Uganda. These are; Civil construction, Site safety and security, Road construction, Bulk material, Cement, Catering, Domestic airline services, Facility management, Food supply, Fuel wholesale, Furniture manufacturing, Generic waste management, General maintenance, Hazardous waste management, Light equipment, Manpower consultancy, Mechanical construction, Production operations, Structural/flat steel, Technical consulting, Transport & Logistics (Goods), Transportation (People), Vendors, Work safety products, Reinforcement steel manufacturing. The National Content Regulations further provide for fifteen categories of goods and services reserved for Ugandan suppliers; Transportation, Security, Foods and beverages, Hotel, accommodation and catering, Human resource management, Office supplies., Fuel supply, Land surveying, Clearing and forwarding, Crane hire, Locally available construction materials, Civil works, Environment studies and impact assessments, Communications and information technology services and Waste management, where possible.
Government has put in place policy, legal, regulatory and institutional frameworks to ensure National Content development in the oil and gas sector, specifically during the development phase where the bulk of the opportunities are. This framework gives first priority of employment and supply of goods and services to Ugandans where capacity is available in the country. Where capacity is lacking, Government is working with the licensees, development partners and the private sector to build the necessary capacity of Ugandan citizens and companies to benefit from the available opportunities. This is being undertaken in line with the workforce skills development strategy and plan and the industrial baseline study. Some of the efforts include, Regulating in-flow of expatriates into the country, Supporting national enterprises to acquire contracts for goods and service provision, Emphasizing capacity building and enhancing the capacity of Ugandan institutions to provide required training at all levels. Dissemination of information on the oil and gas industry requirements such as manpower and services among others, Putting in place an Enterprise Enhancement Center to raise the standards of businesses and entrepreneurs, Development of a National Suppliers’ Database and a National Oil and Gas Talent Register, Development of standards for goods and services reserved for Ugandans among other measures Implementation of an Agriculture Support Development Programme
There are both technical and non-technical employment opportunities in the oil and gas sector (figure 13). These include opportunities for qualified Geoscientists, Engineers, Economists, Accountants, Social Work, among others. These opportunities are advertised in the media and are competitive. The unskilled jobs in the exploration areas are offered based on recommendations made by the community leaders in the areas where the operations take place. The oil and gas sector, is however, not a mass employer but offers more opportunities in service provision and spill over benefits through other sectors such as clearing and forwarding, ICT, hospitality, manufacturing, transportation, construction which are also growing.