All posts tagged uganda


Agreement Signed: Construction of East Africa Crude Oil Pipeline to Start in 2021

The Uganda government and TOTAL E&P, the French oil supermajor, have moved rapidly towards common ground on the country’s oilfield project, with both inking an agreement that paves the way for a final investment decision (FID) on the 230,000Barrels of Oil Per Day (BOPD) development.

Yoweri Museveni, President of Uganda and Patrick Pouyanné, chairman and CEO of TOTAL, signed the Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project. The meeting was held at the Ugandan State House, in Entebbe last Friday, September 11, 2020.

The two parties agreed on the participation of the Uganda National Oil Company (UNOC) in the EACOP as well as on governance issues around the benefits, to Host Governments from the export pipeline in Uganda. The project is expected to cost the consortium $3.5Billion, with construction expected to start early next year, a government statement declared.

The Host Government Agreement aims to ensure that both countries (Uganda and Tanzania) fully benefit from the project in the course of transportation of the crude to the international market. The Host Government Agreement will govern the construction and operation of the crude oil pipeline from Hoima, the Ugandan oil rich district, to Tanja, the Tanzanian port town from which the crude will be exported.

“We now look forward to concluding a similar agreement with the Government of Tanzania and to completing the tendering process for all major engineering, procurement and construction contracts,” said Pierre Jessua, managing director of TOTAL E&P Uganda.

Jessua said the conditions are set for the ramp-up of project activities and in particular, the land acquisition activities in Uganda.

TOTAL E&P Uganda is leading the development activities towards production in the Tilenga project area – Exploration Area1 (EA-1) and Exploration Area2 North(EA-2N) within the Albertine Region.

 

 


Tullow Shareholders Approve Its Sale of Uganda

Tullow Oil says that its request for the proposed sale of its entire interests in Blocks 1, 1A, 2 and 3A in Uganda- and the proposed East African Crude Oil Pipeline System- to TOTAL, was passed by the requisite majority of its shareholders at a General Meeting Wednesday, July 15, 2020.

“The resolution put to the General Meeting was voted on by way of a poll”, the company explains in a release.

Over 99% of the votes cast, or 788,781,164 votes, approved the deal, which was first announced to the market in April 2020.

The Transaction remains subject to a number of other conditions, including customary government approvals and the execution of a binding tax agreement with the Government of Uganda and the Uganda Revenue Authority that reflects the agreed tax principles previously announced.

Subject to the satisfaction of the conditions, the Transaction is expected to complete in the second half of 2020.

Tullow will receive $575Million, with an initial payment of $500Million for the sale. It will pick up the remaining $75Million cheque when the partners take the Final Investment Decision to launch the project. In addition, the Irish independent will receive conditional payments linked to production and oil price, which will be triggered when Brent prices are above $62/bbl.

 

 


Uganda Seeks Transaction Advisor For Refinery

Uganda Seeks Transaction Advisor For Refinery

The Ugandan Government has received expressions of interests from companies bidding to be its Transaction Advisor for the development of an oil refinery. The government will send out invitations to tender or to participate to selected candidates on Monday 22nd October 2012.

When selected the Transaction Advisor shall advise Government on structuring the refinery project, developing a feasible project financing structure, planning and securing appropriate investment partners, development plans for the Refining Company including, but not limited to, preparation of the necessary legal documents for formation of the Refining Company and further detailed agreements and contracts with crude suppliers and petroleum products offtakers.

This is the first formal step that Uganda has taken on its own, to go forward with talks with upstream operators in the country to set up a refinery has stalled several times. But the Ugandan government has been keen on getting a refinery on ground from the get-go of crude oil production.

Tullow Oil, the country’s leading operator, has argued that construction of export pipeline is a more bankable project. The government disagrees. “One of the key findings from a feasibility study (conducted by Forser Wheeler) was that development of a refinery presented better benefits to the country compared to the crude export pipeline”, the government said in the invitation for expression of interest for the role of transaction advisor.

Government’s plan is to develop a 60,000 BOPD refinery that will later be expanded to 120,000 BOPD and then 180,000 BOPD. The strategy is to develop the 60,000 BOPD refinery in a modular manner starting with 20,000 BOPD delivered within 3 years. The Government of Uganda has received a grant from the Norwegian Ministry of Foreign Affairs to contract services of a Transaction Advisor.

The Transaction Advisory Services, which are estimated to last one year,  are expected to be provided by a firm with extensive experience with a minimum of 10 years’ experience in providing similar services. The company should include most important projects of similar type executed during the last 3years including their value, execution period and client. Detailed description of relevant projects executed by the company involving development/planning/evaluation of Transaction activities related to complex petroleum projects in general and particularly in Africa should also be included.

The project team is expected to provide the following key expertise for the assignment:

  1. Experience in oil supply & refining contracts and agreements e.g. Joint venture/cooperation/ participation agreements, Crude oil supply contracts, Oil logistics (supply, transportation, trading and storage)
  2. Project management experience/competence in oil and gas
  3. Legal expertise and experience from international oil and gas
  4. Experience in valuation, incorporation and setting up manufacturing companies
  5. Experience/competence in financing of large investment projects

The ideal consultants should be qualified in their respective fields with a minimum of graduate qualification and with not less than 10 years of experience in the oil and gas sector.

Joint proposals are acceptable, but one company must undertake responsibility as Main Consultant and the others as sub-Consultants to the Main Consultant.


Ugandan Businessmen Call For Local Content

Ugandan private sector interest group, the Association for Uganda Oil and Gas Service Providers(AUOGS), has called on government to include opportunities for local firms in the Petroleum Bills tabled before Parliament.

The country’s legislative arm is debating two bills – Upstream (Exploration, Development and Production Bill 2012) and Mid-stream (Refining, Gas Processing and Conversion Transportation and Storage Bill 2012). The Upstream bill instructs Exploration and Production companies as well as their agents to give preference to goods and services produced or available in Uganda unless they are more expensive or of inferior quantity and quality to those that can be imported. The AUOGS however argues that the provision could be interpreted to the disadvantage of indigenous companies. “Who determines whether the services by local firms do not meet the international specifications?” the lobby group contends. “There should be an independent body to scrutinize whether dealers meet the required standards.”

The AUOGS asks the Natural Resources Committee  of the Parliament-which  has been gathering views from the public to include enough clarity in the law to ensure that local firms benefit from local content opportunities set aside for them.

“Government needs to be clear what a Ugandan company is”, AUOGS Chairperson Bob Kabonro told the committee, “is it one registered in Uganda or one owned entirely by indigenous Ugandans?”  He declared that “there has been lack of enabling laws on the provision of goods and services”.

Emmanuel Baluyi, the lobby group’s lead counsel, requested that laws should give preference to indigenous contractors, encourage joint ventures between indigenous companies and foreign companies and ensure uniform financial and legal accounting standards for ll international oil companies that operate in Uganda.

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