Uganda companies will be awarded contracts worth about $167m, or Shs605.2bn, out of the $1.3bn engineering, procurement, and construction tenders for the Tilenga and Kingfisher oil and gas projects, the energy ministry said, according to award recommendations submitted by the oil companies.
“This accounts for only 19 out of the over 30 work packages to be awarded by the licensees,” said Goretti Kitutu, the minister for energy and mineral development. “It is important to note that there will be many more subcontracts given to Ugandan companies through subcontracting by the Level-1 contractors.”
The Tilenga project is operated by Total E&P Uganda, a subsidiary of Total S.A., while the Kingfisher project is operated by the China National Offshore Oil Corporation, a Chinese state-owned company.
The projects and the proposed pipeline to the Tanzanian coast make up the Lake Albert development project. Tilenga and Kingfisher are expected to produce 230,000 barrels per day at peak production.
The minister made the revelation on Tuesday at a press briefing on Sunday’s signing ceremony for the final three agreements required to launch the East African Crude Oil Pipeline at State House, Entebbe.
“These agreements open the way for the commencement of the Lake Albert development project,” a statement issued by Total after Sunday’s event said. “The main engineering, procurement and construction contracts will be awarded shortly, and construction will start.”
Ms Kitutu added that her ministry expects Ugandan companies participating in the projects will make at least $4.2bn, or Shs15 trillion, which adds up to 28 per cent of the total expected investments of $15bn by the oil companies over the next five years.
The development and construction phase of the three Lake Albert projects will generate some 14,000 direct jobs and 45,000 indirect jobs, according to government estimates. In addition, 105,000 people – over 50 per cent of whom are expected to be Ugandans – will be employed indirectly as a result of utilisation of other services by the oil and gas sector, earning $48.5m each year.
