UNOC @10: A decade of progress and transformation in Uganda's oil and gas sector

_______________________

OPINION

By Angella Ambaho Kariisa

This June 2025, the Uganda National Oil Company (UNOC) marks a significant milestone, a decade of operation since its establishment in 2015. Over the past ten years, UNOC has not only shaped Uganda's oil and gas industry but has also undergone remarkable internal growth and transformation.

From its humble beginnings with a single staff member in Uganda to a workforce of over 200 professionals with operations in Kenya, UNOC has evolved into a robust institution, driving Uganda's energy sector forward while ensuring sustainable development and national prosperity.

UNOC was established under the Petroleum (Exploration, Development, and Production) Act, 2013, and the Petroleum (Refining, Conversion, Transmission, and Midstream Storage) Act, 2013, with a clear mandate to manage Uganda's commercial interests in the petroleum sector and ensure the resource's optimal value for the benefit of all Ugandans.

Since its incorporation, UNOC has expanded its operations, established subsidiaries, and developed strategic partnerships with international oil companies, financial institutions, and technology providers. These efforts have been guided by a robust corporate strategy, which has been meticulously executed to position UNOC as a key player in the regional energy sector.

UNOC’s leadership and governance structures have been pivotal in ensuring the company's efficient and effective management. Governed by a competent Board of Directors and business-driven shareholders, the company has maintained transparency and accountability in its operations. UNOC has two subsidiaries, namely The National Pipeline Company (NPC) in charge of pipelines, the sole importation of the country’s petroleum products, and storage terminals.

Additionally, the second subsidiary, the Uganda Refinery Holding Company (URHC) is tasked with the role of constructing the country’s 60,000 barrels per day refinery and managing the Petrochemical industrial park to be built in Kabaale, Hoima. This strong governance framework has enabled UNOC to navigate the complexities of the oil and gas sector while maintaining a focus on sustainable development.

Through hard work, a results-driven culture, and commitment to targeted, measurable goals, UNOC has continuously raised the bar in strategic performance. This dedication was recognized in 2023 when the company received the prestigious Balance Scorecard Institute Award for Excellence, highlighting its outstanding achievements in strategic performance management. The award underscores UNOC’s strong focus on operational excellence, strategic planning, and effective execution of its mandate.

As the National oil Company, UNOC is committed to integrating Environmental, Social, and Governance (ESG) principles into its operations to foster sustainable and responsible growth. The company has developed a comprehensive ESG strategy, which includes a detailed Environmental and Social Safeguards Management framework. This framework is designed to minimize its environmental footprint, promote biodiversity conservation, and ensure sustainable development throughout its operations.

In the environmental aspect, the company has launched the Alliance for Climate Resilience (ACR) initiative, which has successfully planted nearly 10,000 trees to date, with an ambitious target of planting 40 million trees. On the social front, UNOC annually engages with local communities and district leadership to provide updates, create opportunities, and secure social buy-in for the company.

Development of key projects

Over the past 10 years, UNOC has been at the forefront of key projects that are transforming Uganda's oil and gas sector. Among these is the Kingfisher project, which has a capacity of 40,000 barrels per day, and the Tilenga project, with a production capacity of 190,000 barrels per day. In both projects, UNOC holds the government’s interests of 15% respectively as a key partner.

Additionally, UNOC is playing a pivotal role in the East African Crude Oil Pipeline (EACOP), a 1,443-kilometer pipeline designed to transport Uganda’s crude oil from the Albertine Graben to the Tanzanian port of Tanga for export.

UNOC holds a 15% equity stake in this $3.5b project, reinforcing Uganda's commitment to maximizing local participation and benefits. These projects have reached significant milestones, including securing financing agreements, obtaining land access through fair and transparent compensation processes, and advancing construction activities.

Since its inception in 2015, one of the flagship projects that UNOC has been leading is the Refinery. Designed to process 60,000 barrels of crude oil per day, this state-of-the-art facility aims to meet both domestic and regional petroleum product demand. By doing so, it will significantly reduce Uganda's reliance on petroleum imports and strengthen energy security. UNOC has made significant progress on this front by successfully negotiating key agreements, including the Project Framework Agreement and the Shareholders' Agreement.

In further progress towards the development of the Refinery Project, UNOC has recently signed an Implementation Agreement with Alpha MBM Investments. This agreement formalizes the next phase of collaboration between UNOC and the selected lead investor, paving the way for the final investment decision and detailed engineering design. The signing marks a critical milestone in realizing Uganda’s vision of domestic petroleum refining and represents UNOC’s commitment to attracting credible and strategic investment partners to the project.

To ensure the country’s reserves replacement, UNOC acquired its own license for the Kasuruban Exploration Block, the largest among the five blocks announced in Uganda's second licensing round. This acquisition underscores UNOC's commitment to expanding Uganda's hydrocarbon resource base and contributing to the country's energy security. Since then, UNOC has conducted geological and geophysical studies, leveraging advanced exploration technology to de-risk the block and attract global joint venture partners.

Strategic petroleum storage and distribution

Uganda currently has a storage capacity of 130 billion litres of petroleum. To further enhance energy security, UNOC is making significant investments in expanding strategic petroleum storage and distribution infrastructure. The company currently manages the Jinja Storage Terminal, which has a capacity of 30 million litres. In addition, UNOC has acquired land in Mpigi to build a new petroleum storage terminal with a capacity of 320 million litres.

This new facility will serve as a hub for refined products coming through the Hoima-Kampala multi products pipeline, significantly increasing the nation's storage capacity and bolstering energy resilience.

UNOC has significantly expanded its operations and increased its importation capacity to support Uganda’s growing demand. Initially, the company began with the bulk importation of 100,000 litres of petroleum products before scaling up its operations to 1 million litres.

To date, the company boasts an importation capacity of 1.2 billion litres. This explosive growth is a testament to UNOC’s strategic vision and commitment to expanding its footprint in the energy sector. These efforts were further strengthened in 2023 when the Petroleum Supply (Amendment) Act was enacted, empowering UNOC as the sole importer of all petroleum products bound for the Ugandan market.

UNOC’s involvement in the importation of petroleum products has streamlined the supply chain, eliminated intermediaries, and reduced unwarranted transactions, leading to operational efficiencies and cost savings. This milestone marks a significant turning point in Uganda’s petroleum sector.

As the sole importer, UNOC now plays a central and transformative role in securing the country's energy supply, ensuring price stability, and fostering transparency in the fuel distribution chain. This new role has elevated UNOC’s strategic importance in national planning and positioned the company as a key enabler of energy security and economic resilience.

Industrial and economic impact

Through projects like the Uganda Refinery, Kabalega International Airport and the Kabalega Industrial Park, UNOC is set to spur industrialization in the Albertine region. These initiatives are expected to create a great number of jobs to boost local content and contribute significantly to Uganda's GDP.

A macroeconomic study on the impact of the refinery highted that its existence would lead to a GDP impact of $3.4b, a National Capital Formation Impact of $8.3b, the employment of 32,000 Ugandans, an annual Balance of payment (BOP) impact of $591m and a fiscal impact of $804m. All these results will undoubtedly spur the country’s economy.

The 29.57 square kilometre Kabalega Industrial Park (KIP) in Hoima is already in existence and represents a transformative development for Uganda’s industrialization efforts.

This hub will serve as a catalyst for industrialization, providing a diverse range of opportunities across various sectors. By creating a dedicated space for businesses to operate, the park will help boost local and national economies, attract foreign direct investment, and position Uganda as a key player in regional industrialization.

For Uganda, the park represents a strategic initiative to diversify its economy, moving beyond reliance on oil extraction to build an industrialized nation.

Looking ahead: A vision for the future

As UNOC celebrates its 10th anniversary, the company remains committed to achieving first oil production, expanding refining and storage capacities, and ensuring Ugandans benefit from their resources. UNOC's ten-year journey reflects a decade of strategic vision, leadership, and commitment to national development. From unlocking Uganda's oil potential to driving sustainable growth, UNOC has laid a solid foundation for the country's energy future, including security of supply. Its continued evolution will undoubtedly extend beyond the oil and gas sector, shaping a brighter future for Uganda and the region.

The writer is a senior public relations officer Uganda National Oil Company (UNOC)