By John Odyek
The Association of Uganda Oil and Gas Service Providers has petitioned the Government to provide it with adequate information about equipment and services needed for the oil sector to enable them mobilise resources ahead of oil production.
The association was appearing before the parliament committee on the national economy to explain their preparedness and needs for the nascent oil sector last week.
The association appealed to Parliament to pass legislation that entrenches the participation of local companies in the oil sector.
They said the oil industry is capital intensive and funds have to be mobilised over time.
The committee chairman, Stephen Mukitale, expressed concern that local companies might be edged out by foreign companies if they are not prepared in the race for opportunities in the oil segment.
Experts warn that if public infrastructure such as roads, rail and air transport are not put in place soon, Ugandans will have to wait a little longer to see the first drops of oil.
Ben Mugasha, the managing director of Bemugga Forwarders and founding member of the association, said by 2015, Uganda might have a shortage of 15,000 trucks, foodstuffs and houses to facilitate the oil sector.
“If we could be given the development plans in detail, we would cope instead of saying the locals do not have capacity. The Government has to look at how these will be instituted. Equipment will be brought in by chartered ships and they should not be delayed at ports because there will be high demurrage charges,” Mugasha said.
“It is the Government to secure priority for locals to participate.”
Jeff Bihamaiso-Baitwa, the Three ways Shipping Services group managing director, said Nigerian laws strongly provide for local participation in the oil industry.
He said similarly, Angola, after years of turmoil, copied the Nigerian model and adjusted the local participation in the oil industry to 72%.
Bihamaiso-Baitwa, also a member of the association, observed that the prices for rent will shoot up as foreigners working in the oil sector arrive with dollars and take up houses.
“The cost of living can go up when the economy becomes dollarised. We are not preparing to make money. We need to step up economic activities in other areas so that people do not only look at oil. There may be sudden changes in the local scenarios which Ugandans may not be able to cope up with,” Bihamaiso-Baitwa observed.
He said Uganda cannot build railway systems in the next three years and so the country has to rely on trucks to transport equipment for the oil industry.
“Even if train wagons are used, they need modifications to transport certain equipment; trucks have better capacity to transport different shapes and sizes of loads,” he said.
Wafula Ogutu said building the refinery will require the transportation of 22 million tonnes of equipment.
“It would have been better to transport them by rail and not roads,” Ogutu noted.
Emmanuel Mugararura, the association coordinator, said there are places such as bars, hotels and restaurants where the locals cannot afford to go to now in Hoima district.
He noted that locals are being trained in technical skills such as welding and crane lifting, but if they have to wait for three years to get jobs when oil production starts, they might go to neighbouring countries or do other available work.