NEWS

Created by: UCMP on September, 2022

Linking other sectors of the economy to oil and gas will generate an extra $8 billion

Linkages between Uganda’s oil and gas to other sectors of the economy are progressively being created, a move intended to leave lasting economic values long after the oil and gas production comes to fruition. 

Data published by the Petroleum Authority of Uganda (PAU) indicates that creating linkages between the oil and gas and other sectors of the economy, will raise an extra $8 billion, besides revenues retained from National Content and the government’s share of the profit from oil.  The oil development is therefore a  catalyst for further developments.

Ongoing activities which include site preparation have offered a myriad of opportunities to foreign and local firms across the different sectors including, agriculture, health, transport, logistics, construction, engineering, fabrication, and tourism. This has been backed by strong National Content legislation which requires that international oil companies accord the first priority to Ugandan companies save for where there is a lack of expertise. 

Agriculture

At the latest, the agriculture sector is expected to experience a surge in demands for agricultural produce- fresh foods and cereals in tons monthly to cater to a new market- oil and gas workers numbering close to 5000. 

These demands have created backward linkages with local companies and institutions. For example, the international oil companies contracted Self Help Africa, a non-governmental organization to train farmers in best practices so as to supply food items to oil workers.

 “For us, the main focus is to give the smallholder, resource-constrained farmers an opportunity to engage in this sector,” said Mr. Robert Gensi Regional Agriculture Advisor at Self Help Africa.

Agriculture potential is in line with the increasing purchasing power in the region due to the growing markets for agricultural products from paid workers, the expanding hotel businesses, and various induced jobs.  An expected 1 million people will migrate to the Albertine, pushing additional pressures on food supplies. That does not include the current markets locally and regionally.

Health linkages 

The Environment, Health, Social, and Safety standards in the oil and gas cannot be compromised. This presents a host of opportunities to the health sector to establish state-of-the-art medical services as a strategic move in preparedness for any health issues.    

Opportunities include consultancy services for the development of health management systems, policies, and procedures, Health Risk Assessments, gap analysis, and planning of medical services, Medical Emergency Response, provision of onsite clinics, medical staff, equipment and supplies, and road ambulances.

Other opportunities are Topside Support service- 24/7 medical support (on call), Medical Assistance and Medical Evacuations, Personnel medical insurance, Occupational Health Services, and Fitness Certificate that is currently very costly.  

PAU estimates that the sector could generate  $100 million.

Tourism

Uganda’s natural endowment is a blessing to its tourism which expects a boost from additional 1 million people expected to settle in Albertine Graben in search of gainful economic activities arising from the oil and gas sector. Equally, the International Airport at  Kabaale in Hoima City. The location of the airport shortens the travel distance for visitors to Murchison Falls National Park and Queen Elizabeth National Park.  The newly constructed oil roads will also ease access to various tourist destinations.  

Logistics and Transport 

The greenfield nature of Uganda’s oil and gas project requires the construction of new infrastructures. This has created a boom in the transport and logistics sector, with firms getting contracts to transport construction materials to various project sites. The logistics sector is also supported by a growing number of personnel working on upstream projects and private businesses transporting different kinds of goods. 

The sector is expected to reach a peak during the construction of the East African Crude Oil Pipeline (EACOP), feeder pipelines, and refinery as more equipment will be imported into the country. 

Education sector

The discovery of oil and gas in Uganda sparked demands for developing courses tailored to producing the required skills and talents that would work in the new industry. This called for partnerships with experienced institutions to help design the courses, provide teaching materials, and sponsor students abroad. 

 

Educating the required human resources has been done in collaboration with public and private learning institutions, the government, international oil companies, and other donors.  

TotalEnergies EP Uganda under the Tilenga National Content program has already committed 30,536 manhours worth US$ 3.86 million towards technology transfer initiatives. EACOP and KFDA are projected to contribute at least US$ 2.0 million towards technology transfer initiatives according to PAU.

For example, the department of geology and petroleum at Makerere University has built relationships with the government, the Norwegian government, oil and gas companies- CNOOC, TotalEnergies, and Schlumberger a service company. New courses like geoscience software, practical exploration techniques, health and safety geology, petroleum geochemistry, petroleum economics, and reservoir engineering are now being offered. 

The manufacture 

Oil and gas have created additional markets for manufactured products needed in the construction of different infrastructures like roads, bridges, airports, housing, camps, and office stationery requirements.  Hima  Cement for example said it shall produce special cement for the oil and gas industry. While huge demands for steel products are growing. 

Arising from the oil is also the establishment of Kabaale Industrial Park in Hoima. The industries shall produce petrochemical products, thus promoting the links with the manufacturing sector.