By Toyin Akinosho
Locals Eye the country’s imminent $20Billion Inflow
No one, it seems, is more excited about Local Content Opportunities in Africa’s Oil Industry than Elly Karuhanga(pictured left, above).
A founding partner at Uganda’s top law firm, Kampala Associated Advocates, the serial entrepreneur has stayed on the message for the last three years.
Some $20Billion will be spent in Uganda over a period of less than five years.That’s an incredible amount of money to be spent in a short amount of time.
The countdown starts from when the country’s oil field development, which has been slow in coming, reaches investment sanction sometime in 2018.Uganda’s local businesses cannot afford to stay on and look. They must be ready to get in on the action.
Karuhanga’s message had been spread from his bully pulpit at the Ugandan Chamber of Mines and Petroleum, which he chairs. It has echoed in the annual Ugandan oil and gas convention, which the chamber organises. The serial entrepreneur has spelt things out over and over again in the local newspapers.
Late last October, he took the message to Africa Oil Week in Cape Town, South Africa, this time to call on international companies to partner with Ugandan locals to build capacity. In the process, he appealed to African home-grown enterprises, elsewhere on the continent, especially in places like Nigeria, where there’s a deep layer of African talent, to work with Ugandan companies to capture some of the contract and retain some of the wealth in the land.
“International suppliers need to register in the National Supplier Database to be eligible for the award of oil and gas contracts in Uganda”, Karuhanga told his audience in Cape Town. “Log on to http://petroleum.go.ug/resources/pau_forms and download the registration form”, he said. “Read, understand and internalise the National Content Regulations of Uganda”.
Karuhanga, who has been creating businesses for 40 years, asks those who are interested, particularly rookie businessmen, to “participate in the Supplier Development Training programmes and skilling organised by private sector to sensitize stakeholders and potential suppliers”. He calls on African enterprises to “leverage on international presence and networks to further tap into potential opportunities especially with Ugandan contractors and international oil companies”.
The figure of $20Billion, the proposed overall capital project spend on Ugandan oilfield development, is arrived at by adding the monies to be spent on the three major aspects of development. (1)The upstream segment of oilfield development, including drilling of over 400 wells, construction of two Central Processing Facilities, Flow lines, Feeder Pipelines, Crude Storage Tanks and Power Generation Plants, with Waste management and treatment and logistics services, will gulp $11.3Billion, which is the bulk of the spending.
(2) The Refinery Development, proposed to beneficiate 60,000Barrels of oil per day, will consume $3-4 Billion
(3) The Crude Oil Export Pipeline, the 1,445km, 24 inch heated pipeline running from Uganda’s Hoima to Tanzania’s Tanga, has an estimated Capex of $3.554Billion “to be spent over three years”, Karuhanga says.
Support infrastructure includes an Industrial Park in Kabaale, a district in the country’s Western Region; Road Construction, some 588km of road to be constructed at an estimated cost of $500Million.
A significant chunk of the money will go for the major contracts, which only large sized companies can handle. But the government of Uganda itself has ringfenced some contracts for Ugandan locals companies.
Services To Be Provided By Ugandan Registered Entities
(c) Foods and beverages.
(d) Hotel accommodation and catering
(e) Human resource management.
(f) Office supplies.
(g) Fuel supply.
(h) Land surveying.
(i) Clearing and forwarding.
(j) Crane hire.
(k) Locally available construction materials.
(l) Civil works.
(m) Supply of locally available drilling and production materials.
(n) Environment studies and impact assessment.
(o) Communications and information technology services.
(p) Waste management, where possible.
Commercial Opportunities (Engineering)
• Civil Engineering and Design Services
• Mechanical Engineering Services
• Specialised Engineering Services
• Drilling Equipment & Supplies
• Manufacturing &Supplies (steel, pipes, metal basic structures)
• Management & Technical maintenance Services (Engineering, plant, Surveys
• Equipment maintenance: Generators, Pumps, etc
• Electrical Equipment (installation, repair Maintenance)
• Capital Equipment: industry Heavy Machinery
• IT/Communication Services
• Computer maintenance & System services
Commercial Opportunities (Construction)
•Construction Services (Building, earthworks, civil works, tunneling, piles, caissons etc)
•Construction Materials: Steel, basic structures Construction Materials: Raw Materials (Cement, Gravel, Sand ETC)
•Demolition and site preparation
•Building & facilities maintenance
• General &Site Support Services (Catering, hospitality, maintenance, laundry, cleaning, waste Management; etc)
• Consumables for Site Support (food, water, office supplies, stationery, etc)
• Personnel Services: Vocational, induction, Training & Health Safety & Environment
• Manpower/recruitment services
• Consumables: Uniforms, Personal Safety Equipment (PPEs)
Commercial Opportunities (Logistics)
•Supply Chain Management Services Freight •forwarding,
•Transport of goods
•Vehicle Fleet Management
•Logistics in-country (Car, truck rentals and other vehicles)
•Accommodation for Expatriates
•In-country flight Services
Commercial Opportunities (Other Services)
•Energy: Fuel, Electricity, Generators •Environmental services
•Financial & Risk Services: Banks, Insurance •Hazardous Waste Management
•Consumables: Lubricants/Chemicals •Consumables, replacement Parts
•Maintenance & Repairs
•Site improvement Services (Gardening, landscaping, pest- control)
•Goods: (wholesale Distribution/manufacture e.g. foodstuffs, stationery, drinking water, etc
This story was initially published in the Vol 19, No 1, (January 2018) issue of the Africa Oil+Gas Report