Cabinet Approves Local Content Policy for Oil and Gas

In line with setting stage to position Ugandans to benefit from the massive investments during the Oil and Gas development phase, Cabinet has approved the Local Content Policy for the Oil and Gas industry.

Uganda is estimated to have 6.5 billion barrels of oil deposits with an estimate of 1.4 to 1.7 billion barrels recoverable.

Government along with other stakeholders including the Joint Venture Partners (TOTAL E&P, CNOOC and Tullow Oil) are racing to have the first commercial oil extracted by 2020.

Despite these pre-production investments, some experts have said there is still a lot of work required to prepare the local economy to leverage opportunities within the Oil and Gas sector. About USD 15bn is expected to invested in the course of developing the oil refinery, pipeline and the upstream activities.

It is against this background that Cabinet has now approved the Local Content Policy to build capacity of Uganda’s human resources in the Oil and Gas industry.

The policy was approved during a Cabinet meeting held on Monday at State House in Entebbe.

“The policy will promote employment of Ugandans in the Oil and Gas industry. In two weeks time, the consortium of companies that took up oil contracts will be required to train Ugandans in short, medium and long term skills,” Ofwono Opondo said while briefing the media on Tuesday.

“By 2021, there is no company, foreign of local that should make an excuse why they still need to bring a truck driver, an oil attendant or metre reader at the oil refinery,” he added.

In 2017, Parliament passed the Local Content Act which places priority on employment of Ugandans, procurement of Ugandan companies and use of local goods, in all undertakings where public funds are used or where the undertaking is a licensable activity.

The law will compel foreign oil companies to consider Ugandans and locally sourced products for employment and use first, except in circumstances where the locals are not competent.

The law also grants priority of subcontracting a portion of the contract to a suitably qualified Ugandan company, individual or resident company. It further stipulates specific percentages of contract or obligations to subcontract a Ugandan company or individual.

Opondo added that the new policy will enhance the competitiveness of Ugandan enterprises as suppliers and Joint Venture Partners. It is also aimed at increasing the use of domestically produced or available goods and services by the Oil and Gas industry.

Both government and the private sector are undertaking different initiatives that will see Ugandans acquire skills that meet the acceptable standards to participate in oil and gas activities.

This year, Stanbic Bank launched an incubator to help train SMEs in Managerial and Financial literacy, to enable them access bank loans and boost their competitiveness in winning contracts within the oil and gas sector.

Ugandan firms looking to supply goods and services are required to register with the National Suppliers Database.