Local companies involved in Uganda’s oil and gas sector feel they have acquired enough experience to turn around the fortunes of Uganda’s economy.
Speaking on a panel moderated by Jimmy Mugerwa, the Project Director, Industry Enhancement Centre (IEC), at the 6th Annual National Content Conference recently, representatives of the enterprises also illustrated how the oil and gas sector had reshaped their operations and ambitions to become competitive in the region.
Since entering the sector around 2017/18, ICS Engineering’s revenues have grown by more than 200%, with oil and gas now contributing 60% of the company’s business, said Derek Natumanya, the company’s chief operating officer (COO).
ICS has so far supported both the Tilenga and Kingfisher field development projects in addition to the East African Crude Oil Pipeline (EACOP), where its contribution has ranged from feasibility studies and land acquisition to Engineering, Procurement, and Construction Management (EPCM) supervision.
And thanks to intensive joint venture (JV) work with global players such as Worley, ICS’ Ugandan engineers had picked up valuable skills that are now enabling the company to operate at international standards.
Natumanya noted that these upgraded capabilities are now directly benefiting national projects such as the Kampala Flyover, the Standard Gauge Railway (SGR) and various road construction works, that the company is part of.
“This is what skills and technology transfer means. The uplift we received in oil and gas is what has enabled us to deliver world-class engineering across Uganda,” he added.
Anthony Mugira, Project Manager, Maintenance and Inspection at Inspecta Africa, highlighted how national content provisions had allowed the firm to gain credibility in a highly demanding industry.
From limited capability a few years ago, Inspecta Africa is now an ISO-accredited inspection body, with staff certified in nondestructive testing (NDT), North Sea Lifting (NSL), calibration and various high level standards.
With the help of strategic partnerships, Inspecta is now tipped for a significant EACOP contract.
Chris Kaweesa, the Contract Manager, Albertine Waste Management JV, detailed how exposure to oil and gas has changed their entire business outlook.
The JV has so far managed over 85,000 tonnes of waste in the oilfields, including 58,000 tonnes of hazardous waste, using traceability technologies and advanced treatment systems that have enabled 74% waste valorization.
“The strict standards in the oil industry force you to change your mindset. Simple things like waste categorization have seen us come up with over 50 streams of waste – with each stream treated differently,” he said.
Kaweesa emphasized that this shift has repositioned the company as a strategic risk-management partner – attending to legal and environmental risk posed by the hazardous waste – and not just a waste handler.
For ABMAK Associates, its national content policies that had shaped it into a leading energy law firm, according to Hakim Muwonge, a partner there.
Since inception in 2010, ABMAK has advised on Tilenga and the oil refinery project.
The company remains deeply involved in EACOP as well – supporting everything from route selection to negotiating key project supporting agreements including the Inter-Governmental Agreements (IGA), Host Government Agreement (HGA), Shareholders Agreement (SHA), crude oil offtake agreements plus financing structures.
On the litigation front ABMAK continues to represent Heritage Oil in a major tax dispute with the Uganda Revenue Authority (URA), primarily concerning Capital Gains Tax (CGT) on Heritage’s oil exploration stake sale. URA has since appealed a High Court ruling from late 2024 that favored Heritage.
Muwonge said the firm’s collaborations with international legal giants like Clifford Chance have built competencies now applicable beyond Uganda’s borders.
“These partnerships are enabling us to pursue regional and international opportunities,” he said.
Earthworks at Tilenga in 2024
Arthur Okia, QHSE Manager at Prand Engineering, described the rapid transformation of the fully Ugandan-owned firm that entered the sector in 2021.
After delivering major earthworks for Mota-Engil at Tilenga, Prand gained ISO certification, expanded its workforce from 30 to 100 skilled employees in addition to hiring 300 support workers from the host communities.
Financing support from the Uganda Development Bank (UDB) and Stanbic Bank had stabilized Prand, eventually seeing the 13-year old company contributing to the construction of Hoima City Stadium in partnership with SUMMA.
To accelerate national content further, the companies want PAU and the Tier I contractors to support them acquire advanced capabilities, now that the more specialized production phase is round the corner.
They also want to be provided regulatory support and recommendations to help them win regional and international contracts.
Financing support was also vital in addition to ensuring fair payment terms commiserate to the high demands that define the sector.
Operationalizing the long-awaited National Content Fund would help address the funding challenges afflicting local enterprises, noted Mugerwa.
Supporting national content was vital as it was now more than a requirement to comply with, but rather a powerful tool that would transform Uganda’s economy, Mugerwa, who is also the CEO of Zoramu Consulting, added.
Ugandan companies have won contracts worth $2.2 billion out of $7 billion since the IOCs committed to fund the project in February 2022.
This is in addition to about $1 billion they secured during the exploration phase out of the $3.5 billion invested in discovering the oil.
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