Local firms demand affirmative action in oil sector

By Moses Walubiri

AWARE of the technical and financial edge foreign companies wield over them, Ugandan companies dealing in the oil sector have lobbied Parliament to enact laws that give them preference over foreign firms.

In an animated debate during which the capacity of local companies and Ugandans’ poor work ethics took centre stage, local firms under their umbrella body, the Association for Uganda Oil and Gas Services (AUOGS), said the present arrangement that is dominated by foreign companies is iniquitous.

“Such arrangements present the imminent risk of locking out indigenous Ugandans from the actual benefits of the activities in the oil sector,” AUOGS chairperson Bob Kabonero said.

“This calls for various controls to ensure that the oil discovery translates into tangible benefits for the average Ugandan.”

The services the group wants ‘ring-fenced’ for Ugandan firms include catering, gardening, cleaning, transportation, water supply and ground handling. 

“We are not trying to take the jobs of C-NOC, Tullow or Total, but if a service can be provided by Ugandan firms, why should it be outsourced from South Africa?” AUOGS member Dennis Kamurasi asked.

AUOGS also wants clauses to provide for joint ventures in instances that require capital intensive investment and specialized skills to help equip indigenous companies’ capacities.

This, the group contends, will forestall the creation of monopolies in the oil sector by foreign companies and empower Ugandans to take charge of the sector in future.

AUOGS also wants oil companies to be obliged to hold competitive tendering prior to awarding contracts for supplying goods.

AUOGS lawyer Emmanuel Baluyi called for a strict definition of Ugandan company, saying for one to qualify in this category, it ought to have 80% of its shares owned by indigenous Ugandans.

The natural resources committee is receiving opinions on two oil Bills, the Exploration, Development and Production Bill, 2012 and The Petroleum (Refining, Gas Processing and Conversion, Transportation and Storage) Bill 2012.