UGANDA: Local Contractors Could Earn Up to $1.5Bn From Development Phase

Ugandan contractors could earn more than USD 1.5 billion from contracts associated with the development phase in the Kingfisher and Tilenga oil projects as well as the EACOP and Kabaale Petrochemical city estimated to cost over USD 15 billion. This follows the country’s local content laws which require that not less than 10% of the total
Contract is reserved for National Content and in cases, two bids are very close, by 5%, the winning bid is reserved for that with the highest score on Local Content.

This said there remain numerous hurdles are eliminated that could ensure the lack of participation in these projects including local’s: access to finance, poor infrastructure and human capacity including professional certification. Further, Uganda continues to face an inadequate industrial base, lack of competitive edge internationally and small scale and subsistence production.

This are among the five key areas identified by the 2018 local content policy that the stakeholders in the sector needed to strengthen including develop the competitiveness of local enterprises as suppliers, develop the quality of goods and services to be supplied, build the human resource in the country, promote skill transfer and research and increase the use of locally produced or available goods and services by the Oil and gas industry.

Among the various opportunities available some 16 areas have been secured for Ugandan companies providing goods and services including hotel accommodation and catering, security, fuel supply, crane hire, waste management to mention but a few.

Ugandan companies further have a chance to get subcontracts from international oil companies already awarded including the USD 2 billion McDermott and Sinopec contracted for major Engineering, Procurement, Supply, Construction & Commissioning Services (EPSCCS),  site clearing awarded to MotaEngil, and other drilling completions conditional awards to entities like Schlumberger, Vallourec, among others.


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