The Petroleum Authority of Uganda (PAU) serves as the regulatory body for the nation’s oil and gas sector.
Ernest Rubondo, executive director of the Petroleum Authority of Uganda (PAU)
Established in 2013 under the Petroleum (Exploration, Development, and Production) Act, PAU achieved full operational status in 2016. The mandate of the PAU is to monitor and regulate the exploration, development and production of oil and gas in Uganda, together with the refining, gas conversion, transportation and storage of the same.
Government prioritised and continues to prioritise the building of capacity of its people. This was especially important because the oil and gas industry was new to the country. Government undertook preliminary exploration surveys for oil and gas in the 1980s and early 1990s. These surveys provided good indications for commercial accumulations of oil and gas in the country. Thereafter, government commenced efforts to attract partners with the financial and technical capacity for the next phase of exploration, like drilling.
In 2002, Heritage Oil drilled the first exploration well since the one drilled in the 1930s. It became clear along the way that a lot of opportunity for oil and gas discoveries lay under the Lake Albert region. Government therefore commenced and made it a priority to put in place the policies, legislation and institutional frameworks required to enable a smooth and harmonious development of an oil and gas industry in the country.
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Recent Activities in the Midstream and Downstream Sectors
In Uganda, the midstream segment of the value chain covers refining and gas conversion, together with bulk transportation and storage of commodities. The downstream segment of the value chain, on the other hand, covers the transportation, distribution, marketing and sale of petroleum products.
In the midstream, the Authority approved both the route and the front-end engineering and design (FEED) for the East African Crude Oil Pipeline (EACOP) towards the end of 2020. Public hearings for the Environment and Social Impact Assessment (ESIA) for this export pipeline were conducted by the PAU in the districts along the pipeline route. The public hearings were conducted as part of the effort to evaluate this ESIA in a consultative manner.
In line with the plan for commercialising the country’s oil and gas resources, which was agreed between government and the licensed oil companies in 2014, the development of a 60,000-bpd greenfield oil refinery in Uganda commenced and is estimated to cost over USD 3 billion. Government entered into a Project Framework Agreement (PFA) with the Albertine Graben Refinery Consortium (AGRC) for this development in April 2018.
Some of these activities, like defining the refinery configuration, have been concluded. The FEED and ESIA studies are expected to be concluded by the end of 2021.
The identification and implementation of the optimal participation of Ugandans, and Ugandan enterprises in the oil and gas sector is very important for the country. The construction phases of the production facilities for the Tilenga and Kingfisher projects, EACOP and the refinery are expected to bring into the country between USD 15 billion and USD 20 billion of investment during the next four to five years.
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The PAU in particular and the country at large are working to ensure that a significant amount of this investment is domiciled in Uganda. It is easy to recognise the significance of this level of investment given Uganda’s USD 37-billion GDP. A big magnitude of activity is therefore anticipated in Uganda in particular and the region at large. Other construction projects like roads, hotels, hospitals and warehouses to support the development of the oil and gas industry in the country have commenced.
Uganda is continuing to prepare itself to benefit from the oil and gas industry. The oil and gas sector is going to join the other sectors of Uganda’s economy which are contributing to the ongoing transformation of the country. These sectors include agriculture, education, power, infrastructure and security.
Major Projects: Tilenga, Kingfisher, and EACOP
The three projects launched - Tilenga, Kingfisher and EACOP - are individually bigger, both in size and investment, than the Karuma Hydro Power Project, which is currently the biggest project undertaken in Uganda to date. The development of these projects will provide significant opportunities for Ugandan entities to build capacity, to the very high standards required by the oil industry, during the four-year period of construction.
These entities will provide increased employment, and also earn income from the provision of goods and services. The completion of the construction phase, after the four years, will also be the time when production of oil starts. The country will then start earning revenue from the sale of its oil and gas resources.
Completion of the refinery infrastructure will enable refining some of the crude oil produced in the country into petroleum products like petrol, diesel and jet fuel, among others. This will contribute to substitution of the imported petroleum products currently used in the country, and significantly improve the country’s security of supply for these products.
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National Supplier Database (NSD)
The PAU has established the National Supplier Database (NSD) for companies seeking to provide goods, services, and works to Uganda’s oil and gas sector. This is a central database of individuals and entities involved in petroleum activities in Uganda. The registration process is free of charge and requires document submission.
All applicants undergo verification within two months. Upon successful submission and review, businesses are listed in the NSD for three years from the qualification date. It’s important that all submitted documents are in English.
Regulatory Framework and Compliance
Uganda´s oil and gas industry operates under a strict regulatory framework. This framework aims to ensure safety, environmental protection, and equitable business practices. Exporters are required to comply with Uganda’s standards in the country of origin, and the goods must undergo inspection by an authorised Uganda PVoC service agent.
For those seeking to obtain a PVoC certification for their exports to Uganda, it´s important that you use one of the approved service agents. HQTS, a provider of third-party quality assurance services, has signed an agreement with the Petroleum Authority of Uganda (PAU) and the Uganda National Bureau of Standards (UNBS). This enables HQTS to offer Pre-Export Verification of Conformity Assessments for specialised equipment and materials used in oil and gas projects in Uganda, with the ability to issue a Certificate of Conformity (CoC) upon ensuring full compliance.
Board of Directors
Ms Lynda Biribonwa, an environment, health, and safety specialist, has been appointed Chairperson of the Board of Directors of the Petroleum Authority of Uganda (PAU), succeeding Ms Jane N.
Ms Biribonwa, a certified Lead Environmental Management Systems Auditor with over twenty-three years of experience in environment, health, and safety at strategic, policy, compliance, and practitioner levels, brings her environmental engineering and finance expertise to the Board. Before her appointment, Ms Biribonwa served on the previous Board as the head of the Governance, Board, and Audit Committee.
Others appointed to the new Board include:
- Mr Bernard Ongodia, a Geophysicist with over twenty years of experience in Petroleum Exploration, Development, and Production, who currently serves as the Principal of Uganda Petroleum Institute, Kigumba (UPIK);
- Mr Adrian Bukenya, the Country Director for the Mastercard Foundation in Uganda, with over twenty years of global professional experience in the energy, infrastructure, and financial services sectors;
- Mr. Innocent Kihika, an Energy Lawyer with over twenty-five years of experience in Energy, Mining, and Infrastructure Law.
The new entrants to the seven-member Board include:
- Ms Oduka Ochan Achan, a finance specialist with over forty-two years of experience in financial planning, marketing, strategic planning, program/project design management, institutional and organisational development, communication, and banking;
- Ms Solome Galiwango, a seasoned professional with over twenty years of experience, ten of which are in the energy sector. She is a member of the Association of Energy Engineers and the Energy Efficiency Association of Uganda;
- Prof. Vincent Bagire, a management specialist with over twenty-seven years of teaching experience in strategic management.
Prof. Hon. Ruth Nankabirwa, the Minister of Energy and Mineral Development, will inaugurate and hand over instruments of power to the new Board on July 19th, 2024, at Amber House, Kampala.
During her tenure at the second Board, Ms. Biribonwa headed the Governance, Board and Audit Committee. This committee develops and recommends policies and procedures to ensure sound governance policies and practices are in place and assists the board in fulfilling its oversight role.
Mr Bernard Ongodia is a Geophysicist with over twenty (20) years’ experience in Petroleum Exploration, Development and Production. He served as a Senior and Principal Geophysicist in MEMD. He is currently the Principal of Uganda Petroleum Institute, Kigumba (UPIK), an internationally accredited curricular, centre approved for City & Guilds, Engineering Construction Industry Training Board (ECITB), and Offshore Petroleum Industry Training Organisation (OPITO). During his tenure on the second Board, Mr Ongodia headed the Finance and Human Resource Committee.
Mr Bukenya has over twenty (20) years of global professional experience in the energy, infrastructure, and financial services sectors. Sixteen (16) of these were spent in operations across Africa in senior leadership roles. Adrian has a wide range of experience including business development, government relations, regulatory affairs, organisational transformation, stakeholder engagement, and people growth and development. Mr Bukenya holds an MBA IN Finance and Economics from the University of Oxford and a B.Sc. He is the Country Director for the Mastercard Foundation in Uganda. Prior to this, he served as Uganda Country Manager for Baker Hughes providing advisory to the Baker Hughes & General Electric businesses with respect to the legal and regulatory frameworks.
Mr Kihika is an Energy Lawyer with over twenty-five (25) years’ experience in Energy, Mining, and Infrastructure Law.
Ms Solome Galiwango, a seasoned professional with over twenty (20) years’ experience, ten (10) of which are in the Energy Sector. Ms Galiwango holds an MSc.
Prof. Bagire is the Dean of the Faculty of Graduate Studies and Research. Prior to that he was the Program Officer, Uganda Catholic Secretariat.
Uganda National Oil Company (UNOC)
The Uganda National Oil Company (UNOC), also known as the National Oil Company of Uganda, is a limited liability petroleum company in Uganda owned by the Ugandan government. The 2013 Petroleum (Exploration, Development and Production) Act of Uganda provides for the establishment of the national oil company.
The goal of the government of Uganda (GOU), as set out in the country's energy policy (2002) and National Oil and Gas policy (2008), is to ensure the sustainable utilization of discovered petroleum resources to contribute to early achievement of poverty eradication and create lasting value to society. One of the key objectives is to ensure an adequate, reliable, and affordable supply of quality petroleum products in the country.
The state can participate with between 15 and 20 percent in production, according to existing production-sharing agreements between the state and the three oil exploration companies: Tullow Oil of the United Kingdom, TotalEnergies of France, and the China National Offshore Oil Corporation. It is the National Oil Company that will participate in production on behalf of the state.
The Uganda Oil Refinery that is in the development phase calls for 40 percent participation by the state. The national oil company will invest in the refinery on behalf of the state. Plans were underway to develop a 60,000 barrel per day refinery to serve Uganda and its immediate neighbours. The refinery is being developed on a private-public partnership basis (60 percent to 40 percent). GOU is in the process of finalising the selection process of a strategic investor who will take up the private shareholding.
In July 2022, the ownership in Uganda's crude oil production facilities the Albertine Graben was as illustrated in the table below.
| Facility | Ownership |
|---|---|
| Albertine Graben | See table below |
In May 2017, UNOC began managing the Jinja Petroleum Storage Terminal (JPST), which has a storage capacity of 30,000,000 litres (6,599,077 imp gal; 7,925,162 US gal). JPST is joint venture between UNOC and a private company, One Petroleum Limited.
In December 2018, the shareholders of UNOC resolved that the company will own 15 percent equity in East African Crude Oil Export Pipeline (EACOP), up to 40 percent equity in the Uganda Oil Refinery and at least 51 percent equity in the Kampala Storage Terminal (KST) to be located at Namwabula Village in Mpigi District.
The founding board was chaired by Emmanuel Katongole, an economist and businessman. In March 2024, after the expiry of the second five-year term of the first board, a new board chaired by Mathias Katamba a retired banker was appointed and approved by parliament.
In June 2016, Josephine Wapakhabulo, an electric and electronics engineer, was appointed managing director and chief executive officer of UNOC, being the first person to serve in that position. In August 2019 Wapakhabulo resigned.
In March 2018, UNOC concluded the bidding for transporters to move 45,211 barrels of waxy test crude oil, equivalent to 1,898,862 US gallons (7,187,975 L; 1,581,133 imp gal) from the oilfields in Hoima District, to the Kenyan port of Mombasa. The winner of the tender was expected to be made public in April 2018.
When the first bidding process failed to attract a credible buyer, the oil was re-advertised in June 2018. Failure to dispose of the crude oil before the Uganda oil refinery is completed, will make the refinery the default buyer.
In November 2019, the Daily Monitor newspaper reported that Uganda National Oil Company had secured a buyer for the test crude oil.
In March 2020 UNOC signed a memorandum of understanding (MOU) with Stabex International Limited, an oil products distributor in the African Great Lakes Region. UNOC will import oil products in bulk and sell them to Stabex for onward distribution.
In November 2023, Uganda disclosed that effective 1 January 2024, UNOC was to become the sole refined petroleum products importer in Uganda. UNOC would then distribute to oil marketing companies (OMCs) in the country. Under a five-year contract, the products will be supplied by Vitol Bahrain EC (VBEC), a member of the Vitol Group.
The supplied products will solely be imported though the Port of Dar es Salaam, in Tanzania. In Q2 2023, the Uganda government (GoU) requested the government of Kenya (GoK) for UNOC to use the Kenya Refined Oil Products Pipeline to transport the assets acquired from Vitol between Mombasa and Kisumu. The Kenya government turned down that request.
As of February 2024, the discussions between Tanzania and Uganda are ongoing with the two countries exploring the possibility of building a petroleum products pipeline between Port Tanga and Kampala. Meanwhile, there is a High Court injunction in Kenya, prohibiting the GoK from reconsidering their earlier decision.
Uganda has also opened a lawsuit against Kenya in the East African Court of Justice claiming that denial of the use of the Kenya Petroleum Pipeline runs contrary to the spirit of the East African Community.
In March 2024, UNOC started selling petroleum products in small quantities, to oil marketing companies (OMCs) in Tanzania and Uganda, as the company tests out the supply chain and logistics involved. In March 2024, Uganda and Kenya resolved their petroleum dispute. The court cases in Kenya and Tanzania were both withdrawn.
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