The ministry of Energy is seeking for at least Shs77.8b to fund operations of three agencies under its mandate, the Petroleum Directorate, Petroleum Authority of Uganda, and Uganda National Oil Company.
The three agencies are key in the management and ensuring oversight in Uganda’s nascent oil sector, especially as government fast tracks various activities to start commercial oil production in the coming years.
The request for Shs77.8b is contained in the ministerial statement for 2018/19, which was tabled before Parliament.
PAU was established by the Petroleum (Exploration, Development and Production) Act 2013 to regulate the sector, including scrutinising operations of the oil companies. Currently France’s Total E&P, Anglo-Irish Tullow Oil and China’s Cnooc—and newcomers Australia’s Armour Energy and Nigeria’s Oranto Petroleum are licensed to operate in Uganda.
The same Act established UNOC which is charged with handling of Uganda’s commercial interests in the oil sector, including proposing new upstream, midstream and downstream ventures locally and internationally. UNOC has two key subsidiaries, the Uganda National Pipeline Company through which the country’s stake in the proposed crude oil export pipeline from Hoima to Tanga in Tanzania will be carried and the Uganda Refinery Holding Company, through which interests in the proposed refinery will be carried.
UNOC shareholders, the ministries of Energy and Finance, last November capped Uganda’s equity in the refinery and pipeline at $700m, which the government will have to mobilise.
The body is likewise mandated to carry the country’s 15 percent participating stake in the nine production licenses for the oil fields in Hoima, Buliisa and Nwoya operated by Cnooc and Total E&P. The capex for oil fields development is estimated at $6.7b (Shs24trillion) but UNOC’s stake, including investment, is at the moment being borne by the oil companies up to when commercial production starts.
The Petroleum Directorate is one of the three ministry’s technical directorates, following the restructuring in 2014, and assists in formulation of policies, promotion of investments and granting of exploration and production licences.
The directorate has three units: the Petroleum Exploration, Development and Production (Upstream) Department, Midstream Petroleum Department, and Petroleum Supply and Distribution (Downstream) Department.