Cabinet approves national content policy for oil and gas sector

The cabinet on Monday approved the much awaited national content policy that is intended to promote the competitiveness of Ugandan labour and businesses in the petroleum sector.

Earlier, ministry of energy officials told this website that the policy will go a long way in building local human capacity, promoting employment and boosting the use of domestic goods by international oil companies.

The policy is borne out of the 2008 National Oil and Gas Policy, which formed the blueprint for reforms in the oil and gas sector. The reforms are aimed at using proceeds from the sector to “contribute to early achievement of poverty eradication.”

The new policy is also expected to address the previous wide ranging gap in employment between national and expatriate staff. Between 2012 and 2014, for example, the three oil companies operating in Uganda at the time spent Shs23bn on salaries, of which only Shs6bn was paid to Ugandans employed by the companies. In some cases, expatriates on average earned between 5 to 10 times more than nationals.

The national content policy defines a Ugandan company in the sector as one with at least 50% of Ugandan citizens at managerial level, provides value addition to Uganda, uses available local raw materials, and employs at least 70% Ugandans. It must also be approved by the Petroleum Authority of Uganda, the sector regulator.

All companies intending to participate in the sector are listed on an online database launched last year by the authority.

The launch of the national suppliers’ database followed debates on local participation in the sector, particularly as the country moves to the development and commercial oil production stages in which between $10bn and $20bn will be invested.

An industrial database survey commissioned by the government and oil companies in 2013 estimated that the workforce requirement during the peak period of field development and construction of the oil pipeline and refinery will be 161,700 jobs. Of these, 14,000 will be direct jobs, 42,700 indirect and 105,000 induced jobs.

Professionals – engineers and managers – will make 15% of that work force, according to estimates, while technicians and craftsmen will make up 60% and the rest unskilled labourers.