Business
Budget: Extractives allocation to sustain Uganda’s path to first oil — PAU
According to the acting Corporate Manager at PAU, Didas Muhumuza, the lower allocation reflects the natural progression of the project from large-scale infrastructure development to the final phase of execution.
Uganda's oil and gas sector has entered a critical stage, with attention now shifting tocompleting the regulatory, commercial and operational requirements necessary to begin production. (File photo)
By: Moses Kigongo, Journalist @New Vision
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As Uganda moves closer to achieving its long-awaited first oil production, the Petroleum Authority of Uganda (PAU) says the government's budget allocation to the sector remains sufficient and strategically focused on delivering the final stages of the country's oil and gas projects.
While the allocation to the Sustainable Extractives Industry Programme has reduced from sh877.16 billion in the previous financial year to sh473.51 billion in the upcoming budget, PAU says the reduction should not be viewed as a weakening of government commitment.
According to the acting Corporate Manager at PAU, Didas Muhumuza, the lower allocation reflects the natural progression of the project from large-scale infrastructure development to the final phase of execution.
“This decrease should not be interpreted as reduced commitment, but rather as a reflection of the transition from heavy capital investment towards the final stages of project execution as we approach first oil,” Muhumuza said.
Uganda's oil and gas sector has entered a critical stage, with attention now shifting tocompleting the regulatory, commercial and operational requirements necessary to begin production.
Muhumuza described the current allocation as both necessary and strategic.
He noted that the funding remains “fair and critical,” adding that it is directed towards completing key regulatory, commercial and operational components needed to deliver first oil and ensure long-term sector value.
With the government maintaining focus on these priority areas, PAU remains confident that Uganda will achieve first oil within the current financial year.
“Resources have been deliberately prioritised towards critical areas that directly support project completion. This gives confidence that first oil will be achieved within the current financial year,” he said.
Uganda's oil and gas sector has entered a critical stage, with attention now shifting tocompleting the regulatory, commercial and operational requirements necessary to begin production.
Muhumuza described the current allocation as both necessary and strategic.
He noted that the funding remains “fair and critical,” adding that it is directed towards completing key regulatory, commercial and operational components needed to deliver first oil and ensure long-term sector value.
With the government maintaining focus on these priority areas, PAU remains confident that Uganda will achieve first oil within the current financial year.
“Resources have been deliberately prioritised towards critical areas that directly support project completion. This gives confidence that first oil will be achieved within the current financial year,” he said.
Muhumuza also sought to allay concerns about potential delays, saying the project has largely moved beyond financing challenges and is now dependent on effective execution.
“As highlighted by the Minister of Finance, the project has now moved into a technically driven phase where progress depends more on execution efficiency than financing constraints. This significantly reduces the risk of delays,” he added.
The Authority says collaboration among government agencies, oil companies and service providers remains strong and aligned around the shared goal of delivering first oil on schedule.
At the same time, Muhumuza emphasised the importance of complementary investments, particularly the development of the refinery, which he said will be critical in strengthening Uganda's energy security and maximising the benefits of oil production.
The urgency of bringing Uganda's oil resources into production has also been heightened by global geopolitical developments. Ongoing tensions in the Middle East continue to contribute to fuel price volatility, underscoring the importance of domestic energy sources.
“Uganda’s entry into oil production will enhance resilience, reduce exposure to external shocks, and contribute to long-term energy stability in the region,” Muhumuza said.
However, he cautioned that financial resources alone will not guarantee success.
Effective coordination, disciplined execution and strategic prioritisation will be equally important in ensuring the country derives maximum value from its petroleum resources.
Industry players have echoed PAU's optimism.
Andre Mbigiti, Corporate Affairs Manager at CNOOC Uganda, said the government's continued financial support sends a strong signal about its determination to see the project through to production.
"The Government's allocation to the oil and gas sector is an important demonstration of its commitment to achieving First Oil. Adequate funding is critical because it supports key infrastructure development, regulatory oversight, project coordination and overall operational readiness required to deliver the project successfully.
"While the allocation is a positive step, achieving First Oil will depend on more than funding alone. It will require a clear vision, effective execution, strong collaboration among government, regulators and project partners, timely approvals and continued engagement with stakeholders throughout the process. Uganda's oil and gas projects are now at an advanced stage of development. The priority should be to complete the remaining works safely, efficiently and within schedule while maintaining the highest operational standards,” he said.
“As highlighted by the Minister of Finance, the project has now moved into a technically driven phase where progress depends more on execution efficiency than financing constraints. This significantly reduces the risk of delays,” he added.
The Authority says collaboration among government agencies, oil companies and service providers remains strong and aligned around the shared goal of delivering first oil on schedule.
At the same time, Muhumuza emphasised the importance of complementary investments, particularly the development of the refinery, which he said will be critical in strengthening Uganda's energy security and maximising the benefits of oil production.
The urgency of bringing Uganda's oil resources into production has also been heightened by global geopolitical developments. Ongoing tensions in the Middle East continue to contribute to fuel price volatility, underscoring the importance of domestic energy sources.
“Uganda’s entry into oil production will enhance resilience, reduce exposure to external shocks, and contribute to long-term energy stability in the region,” Muhumuza said.
However, he cautioned that financial resources alone will not guarantee success.
Effective coordination, disciplined execution and strategic prioritisation will be equally important in ensuring the country derives maximum value from its petroleum resources.
Industry players have echoed PAU's optimism.
Andre Mbigiti, Corporate Affairs Manager at CNOOC Uganda, said the government's continued financial support sends a strong signal about its determination to see the project through to production.
"The Government's allocation to the oil and gas sector is an important demonstration of its commitment to achieving First Oil. Adequate funding is critical because it supports key infrastructure development, regulatory oversight, project coordination and overall operational readiness required to deliver the project successfully.
"While the allocation is a positive step, achieving First Oil will depend on more than funding alone. It will require a clear vision, effective execution, strong collaboration among government, regulators and project partners, timely approvals and continued engagement with stakeholders throughout the process. Uganda's oil and gas projects are now at an advanced stage of development. The priority should be to complete the remaining works safely, efficiently and within schedule while maintaining the highest operational standards,” he said.