Praying for the Oil and Gas Sector in Uganda

BACKGROUND

In 2006, commercial quantities of oil were confirmed to exist in the Lake Albert basin in Uganda. It is projected that Uganda has a 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. Further exploration remains on going.

Uganda National Oil Company (UNOC) is the entity that holds oil and gas interests and related business aspects on behalf of the Government of Uganda. The Petroleum Authority of Uganda (PAU) regulates the different players in the sector, including enforcing compliance and monitoring the operations of oil companies.

The oil companies licensed to explore, develop and produce petroleum in the country are: Total E&P Uganda BV, Tullow Uganda Operations Pty Ltd, Tullow Uganda Limited (Tullow) and China National Offshore Oil Corporation (CNOOC) Uganda Limited who are Joint Venture Partners, and Armour Energy Limited and Oranto Petroleum Limited. The Government of Uganda signed Production Sharing Agreements with these oil companies.

Currently, Total E&P Uganda conduct its operations in the districts of Buliisa and Nwoya – the Tilenga Project, while CNOOC conducts its operations in Kikuube District – the Kingfisher project. In November 2020 Total E&P finalized the acquisition of Tullow’s entire interests in Uganda Lake Albert development project. Total E&P and CNOOC are now headed into development phase, which will consequently lead to the production of Uganda’s oil resources. Once produced, the crude oil will be partly refined in Uganda to supply the local market and partly exported to the international market.

The export to the international market will be through an export crude oil pipeline: The East Africa Crude Oil Export Pipeline (EACOP). The EACOP is a 1,443 km heated crude oil export pipeline, USD 3.5 Billion investment that will transport Uganda’s crude oil from Kabaale – Hoima in Uganda to the Chongoleani peninsula near Tanga port in Tanzania.

There is expected to be over 60% increase in Foreign Direct Investment in Uganda and Tanzania during the construction phase. Over 500,000 tonnes of equipment is expected to be imported for the ECOP project. It is estimated that between USD 15 Billion to USD 20 Billion will be collectively spent by oil companies during the development phase of the oil project. *

KEY AGREEMENTS TO UNLOCKING ACTIVITIES IN THE OIL AND GAS SECTOR

1. In order to implement the EACOP project, the Government of Uganda and the Government of the United Republic of Tanzania have signed the Intergovernmental Agreements (IGA) and Host Government Agreements (HGA) – outlining the commitment of both governments to the oil projects.
2. On 11^th April 2021 further key Final Investment Decision Agreements for the implementation of EACOP project including the Shareholders Agreement (SHA) were signed at State House Entebbe. These are key agreements to pave the way for the Final Investment Decision expected around June 2021.

These are long standing agreements that cover a minimum period of 25 years. The oil and gas sector presents a unique opportunity for Ugandan companies, Ugandan citizens, citizens in the East African Community and the world at large to participate in this developing industry

National Participation

It is important to note that the most active time during the development and construction of the Tilenga, Kingfisher and EACOP projects is the first 36 months. This is a critical period for oil and gas opportunities to be harnessed. The period following this will have fewer opportunities mainly dealing with maintenance and operations.

The PAU indicates that 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.

BIBLIOGRAPHY

• PAU website: https://www.pau.go.ug/
• CNOOC website: https://cnoocinternational.com/operations/middle-east-and-africa/uganda
• EACOP website: https://eacop.com

 

HOW THE BODY OF CHRIST CAN PRAY AND PARTICIPATE:

1. Pray for the Tilenga and Kingfisher Projects:

Psalm 127 vs 1-2
Unless the LORD builds the house, those who build it labor in vain.
Unless the LORD watches over the city, the watchman stays awake in vain.

2. Pray for Petroleum Authority of Uganda, Uganda National Oil Company, International Oil Companies and Government of Uganda for good leadership and management and against the schemes of the corrupt (thieves).
3. Pray for success of the East Africa Crude Oil Export Pipeline project and linkages with other sectors of Uganda’s economy.
4. Pray using

Exodus 35:30-35:
Then Moses said to the people of Israel, “See, the LORD has called by name Bezalel the son of Uri, son of Hur, of the tribe of Judah; and he has filled him with the Spirit of God, with skill, with intelligence, with knowledge, and with all craftsmanship, to devise artistic designs, to work in gold and silver and bronze, in cutting stones for setting, and in carving wood, for work in every skilled craft. And he has inspired him to teach, both him and Oholiab the son of Ahisamach of the tribe of Dan. He has filled them with skill to do every sort of work done by an engraver or by a designer or by an embroiderer in blue and purple and
scarlet yarns and fine twined linen, or by a weaver—by any sort of workman or skilled designer.

Pray that God will raise the Bezalels and Aholiabs of our times in whom He has put wisdom and understanding for such a time as this, to know how to do all manner of work for the development of Uganda using the oil and gas opportunities as the Lord commands.

5. Pray that the many different nationalities and cultures coming in to work in the oil sector will find God in Uganda and that they will be a positive rather than a negative influence on our country.
6. Pray for continued cooperation between Uganda and Tanzania.
7. Pray against insecurity both in Uganda and in the region.
8. Pray that Uganda will be the prime beneficiary of what God put in our land:

Isaiah 61:7-8
Instead of your shame there shall be a double portion; instead of dishonor they shall rejoice in their
lot;
therefore in their land they shall possess a double portion; they shall have everlasting joy. For I the LORD love justice; I hate robbery and wrong;
I will faithfully give them their recompense, and I will make an everlasting covenant with them.

9. Pray for enforcement of safeguards to preserve the environment as the Tilega project is in a sensitive ecological area.
10. Pray for the success of the Uganda Chamber of Mines and Minerals Conference on oil and gas scheduled for 4^th and 5^th May 2021.
11. Create linkages and partnerships to harness the oil and gas opportunities in Uganda and in the East African community at large and respond to tenders in the daily newspapers.
12. Ensure that business entities that wish to participate in the industry are listed on the National Supplier Database of PAU and have internationally recognized certifications – UNBS can help with such.
13. Attend online conferences and physical meetings where possible to increase knowledge.
14. Churches can mobilize and educate Ugandans – especially the youth about the existing opportunities and create market linkages.
15. Churches can lead by example especially in agriculture by setting up demonstration plots for church members to learn about expectations of the oil and gas sector especially for food and beverage production.