Tullow urges Ugandans to prepare for oil opportunities

Courtesy: The Observer

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After awarding the first production licence to Cnooc, government expects to award more production licences this time round to Tullow oil early next year.

Speaking at the launch of the Tullow Oil Uganda Country Report at Sheraton hotel on Friday, Robert Kasande, the assistant commissioner in the Petroleum Exploration and Production department (PEPD), said the ministry of energy was still reviewing the applications for production licences.

Kasande, who represented Irene Muloni, the minister of Energy and Mineral Development, said the ministry had received applications for production licences over the eight fields in Exploration Area 2 (EA 2), which Tullow Oil operates.

“These applications are being reviewed and we are optimistic that the discussions with Tullow will be concluded to enable the ministry issue production licence over these fields,” Kasande said.

The government will soon finalise the discussions with Tullow and its partners regarding a memorandum of understanding (MoU) on the commercialisation plan for the discovered resources, Kasande said.
“We hope soon Tullow may begin the production phase, hopefully early next year,” he added.

Jimmy Mugerwa, the Tullow Uganda general manager, said the company was shifting from exploration and appraisal to production.

Skills gap

“We have no rig in the field. We are conducting development studies for the next phase, which is production and commercialization of the resource,” he said.

However, he cautioned Uganda to prepare for the production stage in terms of employment and business opportunities. He asked Ugandans to train in relevant fields. This, he said, would minimise the importation of labour.

“It is just natural that if we do not have the right capacity, we shall import labour from elsewhere,” he said.

A recent study, conducted by Schlumberger, identified gaps in manpower skills as well as business opportunities within the oil and gas sector. Quoting from that report, Mugerwa said annually, the country produces an estimated 7,000 craftsmen and women. This figure is low because, according to Mugerwa, the country will need more than 5,500 craftsmen during the production stage.

“We may think we have enough craftsmen, but they will not be enough, and even the ones available are not of the right quality. If we don’t take serious steps, we many need to import craftsmen,” he said.

Uganda, he said, currently produces an estimated 650 engineers annually. But during the production stage more than 1,400 engineers will be needed. Mugerwa said it was important to train more engineers, who would then head to other markets producing oil.

During production, the country will need to transport 850,000 tons of equipment from the coast of Mombasa into the country, which will require 30,000 more trucks. However, the Schlumberger study found that the country has only 2,000 trucks, which creates a gap.

“The quality of the trucks is also poor. Only 200 estimated trucks were found to be capable of working in the oil and gas industry,” Mugerwa said.

He appealed to Ugandans and local companies to read the report and identify the skills and business opportunities that would be needed during the production phase.

Such opportunities include services like transport, hospitality, communications, banking, catering, waste management, IT services, construction, training and emergency services, advertising and public relations.,