TERepublic November Issue 2021

UGANDA OIL AND GAS
Uganda's JV Partnership Unlocks
New Opportunities for Local and
International Suppliers
Mrs. Peninah Aheebwa, Director – Technical
Support Services, Petroleum Authority
of Uganda (PAU)
Ug a n d a i s u n l o c k i n g n e w
opportunities for local and
international suppliers through
Joint Venture (JV) partnerships in the oil
and gas industry.
At the 6th edition of Uganda International
Oil and Gas Summit (UIOGS) 2021, Mrs.
Peninah Aheebwa, Director – Technical
Support Services, Petroleum Authority of
Uganda (PAU) made a presentation on
U ga n d a ' s S u p p l i e r D e velopment
opportunities which is connected to Joint
Venture partnership to successfully do
business in the country's energy, oil, gas
industry.
Peninah said that the opportunities in
Uganda's oil and gas industry are
enormous, and this is why the idea of a
Joint Venture (JV) partnership comes in, as
Ugandan companies won't be able to
explore the opportunities alone.
She further explained that Uganda has
been involved in various capacity
development initiatives over the years, but
there is still a need for Joint Venture
partnerships.
"In summary, the opportunities are
enormous and there are opportunities for
JV to maximize Uganda National Content.
"In terms of legal frameworks, first of all,
preference is from Ugandans. The goods
and services produced should be rendered
by Ugandan entities".
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According to her, the JV partnership is required
where goods and services are unavailable in
Uganda. On this note, there is a need for
approval by the Petroleum Authority of Uganda
(PAU) to import foreign goods and services to
Uganda.
"There is also a ring-fencing on certain goods
and services for Ugandans. At least 10%
allocated to National Content in total bid
evaluation.
"For bids with less than 5% score difference
during financial evaluation, the bid containing
the highest level of National Content will be
selected.
"All entities are required to register on the
National Suppliers Database.
"Between 2017 to 2020, the Licensed Oil
Companies spent USD 147 million on
procurement, out of which USD 52 million
(35.75%) was spent on local entities owned by
Ugandans.
"We are looking at JVs as a strategy to maximize
national content. The industry is an avenue
where you can identify partners whether you
are a foreigner or Ugandan".
She said that in the year 2020, there were about
2,000 registered companies and most of these
companies are Ugandans but there is a need to
make use of the Joint Venture opportunities to
identify potential partners in Uganda or foreign
companies.
She added that the JVs can be corporated or
incorporated to make it easier for the business
structures, adding that the JV partnership
stands as an opportunity to get finances as
some of these contracts are really huge - over
$1 million dollars and above.
"It is an opportunity to bring resources and
technical capacities together. It is also an
avenue to share experiences with foreign
companies from around the world.
"At PAU, some of the regulatory requirements
we look at is the scope of the business both
companies will take on. We need to see some
demonstration of capacity building and transfer
knowledge and technology.
"We don't want companies to be like brokers or
middlemen but we want the companies to fully
participate in the business so we can achieve
the objectives of capacity building, technology,
and skills transfer.
"Till date, we just have a few successful JVs and
about six of them are in G&G studies but we are
moving on.
"This year, there are a number of applications
that have come in which is very encouraging.
"At PAU, we have done so much to enable
national content and now, we want to focus on
Joint Venture partnership given the complexity
and capital intensiveness of the projects," she
concluded.
The Petroleum Authority of Uganda, also
known as the Uganda National Petroleum
Authority, is governmental organisation that
regulates the petroleum industry in Uganda.
OIL AND GAS REPUBLIC I SPECIAL EDITION