Local Content in the oil and gas Sector in

Presented to the Community Dialogues

Bintu Peter Kenneth Enterprise Development Officer Petroleum Authority of Uganda October 2020 PRESENTATION OUTLINE 1. Introduction:

2. Initiatives to enhance national participation

3. Progress registered

4. Sectoral linkages

5. What next after FID

6. Linkages

7. Conclusion 1. Introduction: National Content Development in the oil and gas sector

Definition Employment of Ugandan • Value added or created in the Ugandan citizens. economy through the employment of Ugandan workers and the use of goods Transfer of produced or available in Uganda and knowledge Capacity and services provided by Ugandan citizens technology; building; and enterprises Key pillars

National Content goal : Use of locally produced Enterprise To achieve in-country value creation goods and development; and retention whilst ensuring services competitiveness, efficiency and effectiveness. Introduction: Existing policy & regulatory framework

 National Oil and Gas Policy  The Petroleum (Exploration, Development and Production) Act, 2013  Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013  The Petroleum (Exploration, Development and Production) Regulations 2016  The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Regulations 2016  The Petroleum (Exploration, Development and Production) (National Content) Regulations 2016  The Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations, 2016. 5 2. Initiatives to achieve National Content National Content Study, 2011 . 1. Opportunities and challenges for Communication of and oil and gas projects Ugandans’ participation in oil gas demand 2. 8. Creation of an projects. Envisage creation Enterprise of technical Enhancement training institute Industry Baseline Survey, 2013 Centre . Undertaken by Oil companies to

assess local capacity to supply the 7. 3. Dialogue between Recommendations Development of oil and gas industry with skills, National Supplier universities and database & National goods and services private employers Talent Register Capacity Needs Analysis / Workforce

6. Skills Devt Strategy and Plan, 2014 4. Support to best Support to specific existing technical & selected sectors . Estimated labor market needs and institutes 5. the gaps in the oil and gas and Support to best existing related sectors over the next ten universities

years (2015 to 2025). 5 3. Progress of National content development

Utilization of goods and services produced and available in the country

Cummulative Investment USD Cum National Content spent 3500 3318 3084 2973 3000 2781 2500 2415 1826 • 2000 1500 1394 1074 909.24 1000 760.92 776 722.07 510 652.95 500 45.22 119.72 193.32 340.2 499.23 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

700Total Annual Investments (Million USD) Total Annual National Content (Miillion USD) 589 600 510  Value retention in the country USD 900M (2012 – 2017) 500 432 400 366  Out of the USD 40m spent on contracts in 2018, 69%(24.8m) 298 320 266 300 234 were contracts signed with Ugandan companies 192 200 146.88 159.03 153.72 148.32 Some areas include; 111 74.5 73.6 69.12 Legal services , Freight Forwarding and customs clearance, 100 45.22 38.85 0 Waste collection services, Assorted PPE, Catering services, 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Survey services 3. Progress of National content development National Supplier Data base: Provides visibility of Ugandan Suppliers

NSD APPLICATION PROGRESS NSD QUALIFICATION PROGRESS

3000 1400 2558 1252 1200 2500 2154 1047

1000 2000 1768 1471 800 1500 600 516 424 1000 774 378 400 513

500 200 135

0 0 2017 2018 2019 2017 2018 2019 UGANDA FOREIGN App Received Qualified 3. Progress of National content development 3 b) Employment

 Since 2017, the sector has employed over 1000 people both directly and indirectly.  Currently, 217 people are directly employed 74% of whom are Ugandans 3. Progress of National content development NOGTR Skill level of talent on the NOGTR 1. NOGTR is an e-government online management information system.

Entry Level 2. It captures demand and supply of Ugandan manpower in the oil 7% (56)

and gas sector. Expert/Mastery 22% (172)

Objectives Basic Entry Level 21% (167) Basic Skilled  Capture information on the available industry talent; Expert/Mastery

Skilled  Provide information on job types/specifications for available 50% (401) opportunities;

 Provide trends/data on development/utilization of talent in the industry; and Establishment of a National Talent Register. A total of  Facilitate cross-movement of talent across sectors. 2,716 talent are registered on the NOGTR 2,176 are male while 540 are female. Domiciliation of international accrediting systems

Institution Area of training International Certifications offered The Assessment and Training Centre Welding, Electricals, Plumbing and scaffolding  City and Guilds (TASC)/Q- Sourcing  American Welding Society through the Egyptian Welding Academy  NEBOSH through SMT- UK  OPITO through Servetec group SEAOWL/O-GAS Basic Driving, Heavy Goods vehicle driving, HSE  British Safety Council  IWFC- International welding certificate  ISO-9001 Sun Maker Energy QHSE, Practical training (welding, drilling.  NEBOSH Social Pipelines), Oil and Gas Engineering Essentials and  OPITO investment Oil and Gas Management.  City & Guilds  International association of Drilling Contractors(IDAC)  International Well Control Forum Uganda Petroleum Institute Kigumba Petroleum technical training  City and Guilds Ongoing - OPITO - ECITB Local Enterprise development

Peer to peer experience sharing  Visibility of Ugandan suppliers through the National Supplier Data base  Information dissemination on opportunities to more than 1000 enterprises  Peer to peer experience sharing and learning through PAU supplier development dialogues  GIZ/SOGA training of companies in HSE management  E360 training of 40 companies in international bid management practices  Posting of upcoming opportunities on PAU website E360: Bid management training Stanbic Bank business Incubator Community Content “local local content”

. IOC scholarships directly targeting the local communities (Primary to University) . Specific Technical Training Scholarships in preparation for the expected workforce (40 CNOOC, 200 TOTAL) under cost Recovery . Agriculture Development Program( , Kukube, , Nwoya). . Community Engagements ( Quarterly Supplier Forums). . Moving training programs closer to the community (St Simons/TASC, Pakwach training –Solid Rock) . Priority in Employment especially at the Technical level Other Capacity Building initiatives

Social investment Skills Development  Training of technicians( over 700)  Training of trainers- Instructors( 50)  Scholarships to undertake post graduate programs ENHANCING SECTORAL LINKAGES WITH OIL AND GAS SECTOR Education sector Define and build a pool of manpower requirements of the industry; both direct and indirect  Agriculture sector Plan for the Influx of indirect and induced labour and to support communities to respond to agriculture opportunities.  Transport 8.8 million tonnes of equipment will need to be transported to the two main oil and gas projects of Tilenga and Kingfisher. This will provide significant demand for haulage and transport, freight forwarding, cargo insurance and opportunities for Heavy Goods Vehicle (HGV) Drivers and Machine Operators Health sector Direct demand by the projects for medical facilities and servicesInflux of indirect and induced labour ENHANCING SECTORAL LINKAGES WITH OIL AND GAS SECTOR Tourism Influx of project induced visitors to the region, improved road network and other utility services in the area like the second international airport and proximity to major tourist sites Housing sector Influx of project indirect and induced workers, several service companies setting up operating offices and bases Land use planning MLHUD is supporting physical planning and infrastructure development in the Albertine Graben OIL AND GAS SECTOR OPPORTUNITIES  Over 161,700 jobs to be created  Direct – upto 14,000  Indirect – upto 42,700  Induced – upto 105,000  Construction materials  Equipment and machinery  Transport and logistics services  1,500 HGV drivers  900 Lifting and earth moving Equipment operators  Food supplies  Medical facilities  Accommodation including residential, Hotels, offices, warehousing  Supportive infrastructure  Permanent and Temporary Camps MONTHLY ESTIMATES FOR A 1000 MAN CAMP Other Foods Include 1. 4,600 trays of eggs Meats 2. 64 sacks potatoes Bacon (Sliced) Sausages – Beef 3. 768 pineapple Sausages – Pork Beef products like fillet, rumb steak, 4. 205 bunches matoke Chicken Products 5. 768 watermelon Fish/Sea Products. Lamb Products 6. 26 sacks rice / posho Lamb Products Smoked Ham- Honey Glazed 7. 1,280 kg tomatoes Whole rabbits Whole turkey 8. 512 kg mangoes Goat meat on bones 9. 1,280 kg onions Dry foods/ Brown flour 10.640 kg carrots Corn flour Porridge(millet) 11.256 heads lettuce Honey 12.1,280 bundles spinach Sweet corn Raisin 13.256 spring onions Red Cherries Yeast 14.Thousands of tonnes of meat Rice Cinnamon Coriander LINKAGES WITH EDUCATION This is driven by the manpower requirements of the industry; both direct and indirect Work force Skills Development Strategy and Plan (WSDSP) 2014 that highlights the existing capacity, the needs of the sector and the gaps to be addressed Over 700 technicians have been trained with support from different development agencies including the World Bank, GIZ SOGA project, Enable/BTC. PAU coordinates the skills dialogue engagements which are geared to form the Association of Oil and Gas Trainers The sector skills council has been constituted to address challenges and gaps in skilling The Albertine Region Sustainable Development Project (ARSDP), at least 600 trainees from 13 districts were selected for skills training. Partnership with development partners like GIZ to support training and accreditation of training institutions. LINKAGES WITH AGRICULTURE

 Key Drivers include;  Direct demand by the projects – demand defined  Influx of indirect and induced labour – demand being analysed  Access to the international market being analysed  Current initiatives  Agriculture Development Program design (PAU, JVs & MAAIF) - to support communities to respond to agriculture opportunities.  Engagements with MAAIF to identify programs being implemented to support Agriculture, especially in the Albertine Graben.  Information dissemination through conferences in , Hoima & Nwoya and documentation of the opportunities in bulletins LINKAGES WITH TRANSPORT • Key Drivers  8.8 million tonnes of equipment will need to be transported to the two main oil and gas projects of Tilenga and Kingfisher  This will provide significant demand for haulage and transport, freight and forwarding, cargo insurance and opportunities for Heavy Goods Vehicle (HGV) Drivers and Machine Operators

• Initiatives undertaken  Infrastructure development, international airport and roads being put in place  Initial efforts placed on registration exercise of HGV drivers and lifting and earth moving equipment operators. To date, approximately 6,363 HGV drivers registered - about 5.8% of the total licensed HGV drivers and operators  PAU supported the identification of funding for the HGV training schools under the Skills Development Fund (SDF) run by the Private sector Foundation Uganda (PSFU). The only two licensed HGV training Schools (UDSA and Safe way right way) with the Uganda Professional Drivers Network and Victoria motors obtained in principle a sum on US$600,000 to among others acquire equipment and train at least 450 HGV drivers in the EAC curriculum.  PAU working with Trademark East Africa to identify possible areas of collaboration in the skilling of HGV drivers. Trademark is finalising the procurement of a consultant to undertake a baseline study on the quantity and quality of HGV drivers during 2019/2020 LINKAGES WITH HEALTH

 Key Drivers  Direct demand by the projects for medical facilities and services

 Influx of indirect and induced labour

 Initiatives undertaken  On 5th July, 2019, the PAU in collaboration with Ministry of Health and Uganda Healthcare Federation (UHF), held a conference with the key stakeholders to discuss health investment opportunities in the Oil and Gas sector  In May, 2019, the PAU undertook a six-day visit to the Albertine Graben and Pipeline districts with key players in the public and private health sector to assess the readiness of the health facilities for the expected influx of people induced by the oil and gas activities  Scheduled visit at the beginning of 2020 to assess the standards of the facilities to service the Oil and Gas sector needs and develop a costed phased implementation plan for both private and public sector scheduled for Q1 2020 LINKAGES WITH TOURISM

 Key Drivers  Influx of project induced visitors to the region

 Improved road network and other utility services in the area like the second international airport

 Proximity to major tourist sites

 Initiatives undertaken  The PAU and the Ministry of Tourism, Wildlife and Antiquities (MTWA) are planning a comprehensive study to map out the tourism opportunities in the oil and gas sector. Investment in tourism will ensure sustainability of the other investments in infrastructure  MTWA engaging the World Bank on the possibility of including the tourism opportunities study under the planned study on the impact of oil on the environment. The Ministry is also working with the Uganda tourism Board (UTB) to procure a consultant to evaluate the available opportunities for the Tourism Sector in the Oil and Gas sector  Field trip as a preliminary opportunity mapping study to establish this potential as a foundation for a comprehensive investment promotional strategy was undertaken.  The Tourism sector has the potential to benefit significantly from the new Kabaale International Airport and LINKAGES WITH HOUSING

 Key Drivers Influx of project indirect and induced workers

Improved road network and other utility services in the area

Influx of service companies setting up operating offices and bases

 Initiatives undertaken  Set up a housing sector taskforce to identify possible opportunities for linkages (NHCCL, HFB, NSSF, MLHUD)  Two field trips were undertaken aimed at enabling the stakeholders to appreciate the expanse of the project area and the second was aimed at gathering information for the development of a strategy and plan to guide housing planning and investment in the oil and pipeline affected districts.  A Housing sector conference will be held in 2020 during which the findings will be disseminated to housing sector stakeholders. LINKAGES WITH LAND USE PLANNING

 The oil and gas sector together with the land use planning sector undertook a benchmarking study to California during December, 2011, to benchmark best practices in the land use relationships between communities and the oil and gas developments

 The then Town & Country Planning Board under MLHUD subsequently declared the graben a Special Planning Area in its 391st meeting held on 17th March 2010 which was followed by preparation & approval of a plan for the Albertine Graben in its entirety.

 MLHUD is supporting physical planning and infrastructure development in four areas; Hoima, Buliisa & District LGs & Buliisa Town Council.

 Physical Development Plans for Nine (9) urban centres; have recently been finalized - , and Biiso in ; Kigorobya, & Butema in as well as Kiziranfumbi, Kyangwali, , Kyarushesha and Buhuka in . http://mlhud.go.ug/albertine/ LINKAGES WITH LAND USE PLANNING

 Implementation of these plans is also ongoing through improvement of connectivity between rural & urban areas - local roads & bottlenecks improvement (118km in Hoima and Kikuube, and 31km in Buliisa)

 Plans to support capacity building of the respective councils to implement the plans are also underway

 In addition, about 10 km of urban roads mainly in Buliisa Town Council and Port shall be upgraded to bituminous standard.

 Local economic infrastructure shall be improved, including construction of markets (13No.), fish landing sites (2No.), fish cages (25no.), and animal slaughter house (1No.). A feasibility study for these is nearing completion. Other impacts to the community

Social economic impacts  Tourism sector: Improved accommodation facilities in the Albertine region

Mikka Eco Resort Agriculture: Increased production Social investme nt Social economic impacts  Upgrading of the road network: Kaiso Tonya Road access to markets  Enhanced communication net work  Construction of Health centers & school  Livelihood restoration projects

Social investme nt

Buliisa Health Center Social economic impacts

 Medical kits donated to Health Centers  Scholarships for post graduate training Social investment  Training support to VTIs through placement of industry experts  Construction of health centers and schools  Donation of computer hardware

Social investme nt What next after FID Construction of oil field development facilities, Crude Export pipeline and other support infrastructure. Implication a) Over 161,700 jobs to be created: Direct –14,000, Indirect –42,700 and Induced –105,000 b) Increased demand for  Construction materials  Equipment and machinery  Transport and logistics services  1,500 HGV drivers  900 Lifting and earth moving Equipment operators  Food supplies  Medical facilities  Accommodation including residential, Hotels, offices, warehousing  Supportive infrastructure  Permanent and Temporary Camps Conclusion

The Oil and gas sector presents significant opportunities for the Country especially through infrastructure development

Various efforts are being put in place to ensure participation of Ugandans through employment and supply of goods and services

Linking with other sectors of the economy is key for ensuring sustainability and balanced growth. For more information please contact [email protected]

www.pau.go.ug