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Oil & Gas: Tanzania Commends Uganda’s Local Content Policies

The EWURA_PAU_&EACOP team listen to a TotalEnergies supervisor  at the Tilenga Industrial Park that will host the CPF

The Energy and Water Utilities Regulatory Authority (EWURA) of Tanzania has applauded Uganda for its robust local content plans and management in the nascent oil and gas sector.

EWURA regulates oil related activities and water related use in Tanzania. The authority’s board and top management were in Uganda recently on a week-long supervisory field visit to the East African Crude Oil Pipeline (EACOP) section of Uganda and the upstream developments in the Albertine Graben.

The delegation was led by the Tanzanian High Commissioner, Dr. Aziz Ponary Mlima and the EWURA board chairperson, Prof. Mark Mandosya. The delegation started their supervisory visit from Dar-es-Salaam following the EACOP route enroute to Uganda via the Mutukula boarder point in Kyotera district.

During a review meeting held in Kampala between the Petroleum Authority of Uganda (PAU) and EWURA, Prof. Mandosya said their 5-day working field visit had showed that Uganda has surpassed many other African countries in ensuring that Ugandans participate actively in the oil and gas sector.

“We are glad we have had a candid tour of the oil and gas projects in Uganda. I should say that I’m impressed with the progress of work and the number of Ugandans employed on this project,  many of those working on the project are Ugandans,” Prof Mandosya said.

He added that Uganda’s delay to develop its oil and gas resources had helped in preparing the ground, which is a commendable feat.

Ms. Peninah Aheebwa, the Director Economics and National Content Monitoring at PAU told the delegation that Uganda’s deliberate commercialisation strategy is twofold; optimal exploitation of the resources and ensuring the country retains a good percentage of the investments.

“We have approved contracts worth US$ 6bn since the announcement of the FID (Final Investment Decision), and of these, at least US$ 1bn has gone to Ugandans at the different levels, Ms. Aheebwa revealed.

She added that unbundling of the contracts—encouraging subcontracting and joint ventures—ensured that Uganda scores well on the national content front. In addition,  92% of the over 6,500 people employed in Uganda’s oil and gas sector were Ugandans.

Uganda’s National Content Policy requires every entity involved in the oil and gas sector registers on the National Suppliers Database (NSD), an online repository that is overseen by PAU. This gives the PAU visibility about companies that are given contracts by the International Oil Companies. PAU is charged with approving of all contracts in the oil and gas sector and requires every contractor to submit a national content plan before it is awarded a contract.

PAU and EWURA are jointly monitoring and regulating the construction of the 1,443km EACOP project that will transport Uganda’s crude oil from Kabaale, Hoima in Uganda to the port of Tanga in Tanzania before being shipped to the international market.

The EWURA team was in Uganda from March 1-5, 2023, and visited some of the resettlement houses handed over to the Project Affected Persons (PAPs) in Kyotera, and Ssembabule districts. The delegation also visited the Main Camp and Pipe Yard (MCPY) 1,3,&4 in Kakumiro, Sembabule and  Kyotera respectively. The MCPYs will be used for storage of pipes, piping and equipment for the construction of the EACOP and act as construction support bases.

It was also noted that the EACOP is a green project planned to use renewable energy mix of hydropower and solarisation as power supply in line with the ongoing energy transition.

 

Mr. Dozith Abeinomugisha, the Director Midstream at PAU told the visiting delegation that Uganda had made commendable progress on the EACOP project especially on the land acquisition process.

“Compensation of PAPs  for MCPY 1 is at 100%, MCYP2 and Pump Station 2 is at 99% with only one PAP left,” Mr. Abeinomugisha said.

In upstream, the delegation visited the Tilenga Project under the operatorship TotalEnergies E&P, the Kingfisher project under the operatorship of CNOOC Uganda in Kikuube district, and the Kabaale Industrial Park that will host among others, Pump Station 1,  the proposed refinery, and the Kabaale International Airport.

The EWURA Uganda visit coincided with the recent French Court ruling that threw out a out a lawsuit brought by environmental campaigners against the French energy giant TotalEnergies over its oil projects in Uganda and Tanzania. The campaigners wanted the court to order TotalEnergies to stop the East African projects under France’s duty of vigilance law.

Prof. Mandosya said the ruling was an indictment  for those who were vouching for the failure of the EACOP.

The Joint team of EWURA and PAU at the Tilenga Industrial Area in Buliisa district

“This is the largest project to be undertaken between Uganda and Tanzania since Independence, as such as EWURA and PAU we have an enormous responsibility to ensure that this project succeeds and is undertaken as per the regulatory requirements in both countries,” Prof Mandosya said.

Dr. Jane Mulemwa (PhD), the PAU Board Chairperson used the visit to re-echo Uganda’s commitment to develop its resources in a sustainable manner given the sensitive nature of the biodiversity the project is situated.

“I had no doubt that they would lose that case unless the rest of the whole world had gone mad. It is them (campaigners) that didn’t know what is on ground, but the facts are there for everyone to see, we cannot destroy our own biodiversity,”  Dr. Mulemwa quipped.

During the review meeting,  Ambassador Dr. Aziz Ponary Mlima applauded the two regulatory agencies and urged them to continue the cooperation and share with the public information to close the misinformation gab being utilised by the anti-EACOP campaigners.

The joint supervisory visits are undertaken in line with the Memorandum of Understanding signed between the PAU and EWURA in 2020.  The two regulatory agencies also agreed to work together to advance capacity of their staff through attachments and aligning of all the monitoring and regulatory framework.

PAU undertook a similar visit to the Tanzanian section of the EACOP  from January 29 to February 6, 2023.

 

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