www.ucmp.ug The Uganda Chamber of MINESMINES && PETROLEUMPETROLEUM Issue: 8 May - July

LCourtots at stake in Tullow, Battle Heritage case

The ladies in the industry

How t he insurance sector can address petroleum c hallenges

Krone defies the odds Plot 11/13 Lower Kololo Terrace Fax: +256 (0) 312 229 234/5 Website: www.aon.com Bollore Africa Logistics (U) Ltd. Plot M-611, Ntinda Road. | P.O. Box 5501, Kampala. | Tel: +256 414 336000, +256 312 211000. Fax: +256 414 286345 /289 191 | Email: [email protected]

www.bollore-africa-logistics.com UCMPCHAMBER Council COUNCIL Members

Hon. Elly Karuhanga Loic Laurandel Chairman COUNCIL

President – Tullow Oil, Uganda, Total E&P, Uganda Country Managing Partner – Kampala As- Manager sociated Advocates and Director dfcu bank, Nile Breweries and other companies

Hon. Richard Henry Kaijuka Kellen Kayonga, Vice Chairman COUNCIL

Chairman EA Gold and Manag- Managing Director, of Askar ing Director, Berkeley Reef Ltd, a Security Services fully-fledged Mining and Mineral Exploration Company

Paul Sherwen Jimmy Mugerwa, GEN.SECRETARY COUNCIL

President & COO of IBI’s 30% Tullow, Uganda Country owned affiliate company Grey Manager Crown Resources Ltd. Also the Finance Director of Strategic Logistics Ltd

Jeff Baitwa David Kyagulanyi Treasurer COUNCIL

Director ThreeWays Shipping Country Manager, Fels Con- Services [Group] Ltd sultants Ltd

Xiao Zong Wei Irene Nakalyango COUNCIL COUNCIL CNOOC, Uganda, CEO, UCMP President Xiao Zong Wei

 The Uganda Chamber of Mines & Petroleum UCMP CouncilAdvisor sMembers

Marilyn Hill ADVISOR

Country Manager, Neptune Pe- troleum, Uganda; a subsidiary of UK’s Tower Resources

Joshua Tuhumwire ADVISOR

Mining consultant, Gondwana Geoscience Consulting Ltd. Also former Commissioner of the Uganda Department of Geologi- cal Survey & Mines

Matthew Tallarovic ADVISOR

Partner, Deloitte (Uganda) Ltd

Gordon Sentiba ADVISOR

Director, Astor Finance Plc Ltd

Jimmy Kiberu ADVISOR

The Uganda Chamber of Mines & Petroleum   The Uganda Chamberof Mines &Petroleum Chairman’s Note Elly Karuhanga I hopethatyouenjoyyourread. they canquicklygetbackontheirfeet. that pray We banks. its burst Nyamwamba River the when recently floods devastating suffered who district Kasese wider the and Kilembe of town copper the in sisters and brothers our with commiserate to platform this use to like would I West, the of Talking on whattheycando. members to take part in the upcoming trips as they will definitely increase their options our of more encourage We revealed. opportunities immense with opener; eye an as it saw trip this undertook who members The Uganda. Western in areas mining key the of most in taking year, this of quarter first the in happened trips these of first The are. industries extractive our where of picture clear a us give should that country the across Apart from the conferences, the Chamber has also started carrying out fact-finding trips visitors aswesharetheUgandanexperiencewiththem. us upon is (UMEC) and our Conference Chamber will be ably represented. We look forward to learning more from Gas our & Oil & Energy Mining, Uganda, first the Now, meet. successful this of partner organizing an was Petroleum and Mines of Chamber Uganda the that proud the am I discussed. and at shared was lot a albeit where summit Mining & – Oil,Gas holdup the COMESA the at counterparts despite regional its hosted Uganda recently vibrant Just level. workshop remained has industry the Importantly, and critical Being year. intricate, thefinalisationofMoUshouldseteverythinginmotion. the of course the during submitted be will that Applications It is expected to include a number of Field Development Plans and Production Licence prepared and will form the basis of the integrated development work plan for the basin. being now is agreement, this document to Understanding, of Memorandum a website, Like Tullow Oil Plc noted in its recent Interim Management Statement on the company country. producing oil an become to quest Uganda’s delaying also but providers service their only not hurting the heavy investment already committed process to the cause by the oil companies and the in industry; the in inactivity the to significantly contributed issue had very this on impasse An demand. market local the meet to sized refinery a and been reached on a basin commercialisation plan which will include an export pipeline has agreement Critically, welcome. will industry petroleum country’s that the in news everyone is Graben Albertine the of development the impact that factors key the on The recent reaching of a common understanding between Uganda and the oil companies almost there We are As the East African energy market continues to expand, Halliburton-the continent's leading energy services provider-is expanding right along with it. With new o ces in Uganda, Kenya, Mozambique and Tanzania. Halliburton experts stand ready to quickly and e ciently meet your needs, providing proven solutions-along with unequaled safety, customer service and community commitment.

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Tullow, Heritage await London 10 court $313 million tax decision

Oil industry awaits 16 new licensing round 16

Mining Industry in 20 Western Uganda

Banks prepare to 27 spend big on oil 42

Acknowledgements Layout and Design: Editorial to the editorial team assisted Moses L. Katumba Deep Earth International Ltd. by Richard Kaijuka. ([email protected]) ([email protected]) **This publication may be copied in whole or in part for any purpose, provided full credit as to source is given with the reproduction and that none of the material is incorporated into a document for which a copyright is sought. Handling petroleum 30 insurance challenges

Meet the ladies holding 34 their own in the oil industry

How tax rates are 38 applied on formal jobs

Tullow reaffirms 46 commitment to Uganda

The Uganda Chamber of Mines & Petroleum  A Lot At Stake As… Tullow, Heritage await London court $313 million tax decision

The judge in London trying to get to the of how African governments should Uganda’s government announced that bottom of the $313 million tax dispute treat tax issues when it comes to their it would recognise Tullow’s acquisition between Tullow Oil Plc and Heritage mineral industries, learning from the of Heritage’s assets for $1.45 billion if Oil Plc will very likely look to the kind wobbled trail of this particular case. Capital Gains Tax on the deal was paid. of agreement the two firms had while exploring for oil in western Uganda. History Heritage disputed the tax on grounds The judge will look at the East African’s After acquiring Energy Africa in 2004, that Uganda’s laws were silent on that. tax laws for guidance, and quite and later Hardman Resources in 2006, The company said it would challenge possibly whether there was a deliberate Tullow Oil partnered Heritage Oil in the decision to levy tax on the deal in intent by Heritage Oil to evade tax. exploring for oil in Western Uganda. court. While Heritage desired a court battle in London, Uganda’s government Tullow and Heritage have been locked Later in 2006, Uganda discovered its insisted that its judicial system, up in the dispute for close to two years, first commercially viable oil at the especially the Tax Appeals Tribunal, with the ruling expected sometime later Waraga well. From thereafter, it almost was strong enough to handle the case. this year. became one successful discovery after another. In 2009, however, Heritage Tullow paid Heritage two instalments At the centre of the case is whether made its intention of quitting Uganda. for the assets - $1.35 billion and an Heritage Oil was supposed to pay At the time, Heritage had struck oil additional $100 million - in July 2010. tax on the sale of its Uganda assets at one of Uganda’s biggest well, the Uganda’s government slapped a $404 for $1.45 billion, and questions over Kingfisher, which is estimated to hold million capital gains tax, or 30%, Tullow Oil’s decision to pay that tax on more than 500 million barrels. on the $1.35 billion deal. Later on, behalf of Heritage. government also made a second capital Heritage, according to reports then, gains tax assessment of $30 million on In getting to the bottom of the case, kicked off discussions with Italy’s ENI. the second instalment of $100 million. the final judgement will offer clearer financial direction for international In January 2010, however, Tullow pre- Of the $404 million tax charge, companies prowling over the African empted its first right to buy Heritage’s Heritage deposited $121 million with continent in search of minerals. But assets, as both parties had agreed in the Uganda Revenue Authority, with the broadly, the case offers a good example Sale and Purchase Agreement. rest, $283 million, placed in an escrow

10 The Uganda Chamber of Mines & Petroleum account with Standard Chartered Bank, along Fetter lane in the Rolls building points out that Article 7.2 of that Sale London. According to Ugandan laws, in Court 19, in London. and Purchase Agreement is strong anyone who disputes a tax charge has enough to have Heritage reimburse to deposit 30% of the amount due Deconstructing the Case the $313 million. Under that Article, before going to court, with the rest Heritage Oil says under the Production “Any non-transfer taxes arising in the of the money placed in an escrow Sharing Agreements it signed with the respect of the Transaction, including account. government of Uganda, and Uganda’s any capital gains tax, shall be borne by tax laws, there is no mention of capital the Seller... In the event that any Non- Chasing the Money gains tax being paid just in case Transfer Taxes is charged at any time With Heritage gone without paying the there was a sale of a mineral licence. to the buyer in connection with the full tax, Uganda issued Tullow Oil with In any case, Heritage argues that transaction, the seller shall in each case an agency notice. Tullow was required Tullow’s acquisition of Energy Africa pay to the Buyer an amount equal to to pay the amount that the GOU felt and Hardman, both of which were such tax.” was due from the $1.45 bn. operating in Uganda at the time, did not fetch any capital gains tax. Uganda recovered the expired license It has also become clearer that to the Kingfisher oil well, declined However, by the time Tullow bought Heritage’s attempt to stir up controversy to approve Tullow Oil’s proposal to Energy Africa and Hardman, no on allegations that Tullow tried to sell two thirds of its Uganda assets to commercially viable oil had been bribe President Yoweri Museveni France’s Total and China’s CNOOC discovered in Uganda. Also, Tullow with $50 million – both Tullow and for $2.9 billion, while much of the bought shares in the companies, which Uganda strongly deny these allegations exploration work came to a standstill as meant that any gains made were related – are diversionary from the merits and the dispute dragged on. in another country and not Uganda. demerits of the case.

The government issued Tullow Oil The judge will also look at Heritage’s Nevertheless, Heritage argues that with a tax bill of $313 million. The actions just before concluding the sale Tullow did not have any contractual money equalled the $283 million that of its assets, and try and see whether obligation to pay any money on its was held in an escrow in Standard they raise any suspicion of tax evasion. behalf. It adds that Tullow “made Chartered London, and the $30 million Heritage relocated its tax headquarters the payment to the Uganda Revenue capital gains tax on the $100 million from the Bahamas to Mauritius shortly Authority for its own commercial that Heritage had gotten in the second before completing its deal with Tullow. reasons,” and that the Irish firm was instalment. And Heritage is accused of doing this aware that Heritage had disputed the without alerting Tullow or the Ugandan tax assessment. These commercial Faced with limited options, Tullow paid government, something that they were reasons, Heritage argues, were Tullow’s up the money in April 2011, 10 months contractually obliged to do. Mauritius is plans to farm down two third of its after Heritage had received its money known to be a tax haven, and Uganda assets to Total and CNOOC, and and gone. Later that year, Uganda’s has a double taxation treaty with the retrieve the Kingfisher licence. Tax Appeals Tribunal ruled in favour of country. the government in two separate cases, Whether Heritage Oil is using pointing out that Heritage should have But of more interest is the Sale and diversionary tactics, and flimsy excuses paid tax on both the $1.35 billion and Purchase Agreement between Tullow to avoid paying the tax; or if Tullow Oil $100 million transactions. and Heritage as the two embarked on miscalculated to pay the $313 million, being partners in the oil exploration the decision will put to rest a case But right after Tullow paid government activities in western Uganda. that will for a long time define how the $313 million, it instituted legal tax matters are treated in Uganda’s oil proceedings against Heritage, the While there might be questions over industry. spectacle of which is being played out Uganda’s tax laws at the time, Tullow

The Uganda Chamber of Mines & Petroleum 11 Anxiety won’t go away with continued delays

When Uganda discovered rich oil ment. The government and the com- deposits in 2006, many people hoped For starters, this was a time when the panies have at least already agreed the that in just a couple of year or so, the country was experiencing a severe refinery size and an oil export pipeline country could begin oil production, electricity shortage where thermal – but are working out the details of the bringing in the much needed cheaper generators were installed to scale down pipeline capacity, which will depend petroleum products and triggering eco- load-shedding, driving the cost of fuel on the field development plans (FDPs). nomic growth. high. Loic Laurendel, Total E&P General To their disappointment, 7 years down In fact, on November 26, 2008, Manager recently said that once the the road, the country is yet to pump out government signed a memorandum FDPs are approved, an oil company even a single barrel of oil; a delay that of understanding (MoU) with Tullow would need not less than three years to has left not only the public but the oil Oil Uganda Ltd to actualize the Early put the required infrastructure in place. companies that have already injected Production Scheme (EPS). colossal sums of money in the industry, The process of constructing the north- very apprehensive. Kashambuzi explains that the EPS ern and southern crude pipelines to hoped realize, on a daily basis, at least the refinery in Kabaale Hoima district More worryingly, the country already 500 barrels of diesel, 180 barrels of is yet to kick off, while the process of appears behind schedule to start oil kerosene, 120 barrels of naphtha and constructing an oil refinery has just production by 2016, as it had hoped. 3,200 barrels of heavy fuel oil HFO) for started with the hiring of a transactional electricity generation. advisor to guide Uganda on how best EARLY PRODUCTION SCHEME to secure finance and source for a Soon after the discovery, government However, following more discoveries, developer. announced plans to first track oil Kashambuzi wrote, it became clear that production by 2012, through the Early a larger refinery could be sustained. In But even after the procurement of a Production Scheme. Later, however, 2008, the East African Community con- developer is complete, construction of the scheme was abandoned in favour of ducted a study that revealed a 150,000 the refinery is expected to take between a larger refinery. capacity refinery to serve the regional 3-5 years, meaning that the country demand, and therefore government might miss the 2016 target, causing In his book, ‘The Story of Petroleum abandoned the EPS in favour of a large another long wait. Exploration in Uganda, A matter of oil refinery. Faith, 2008’, Reuben Kashambuzi, a Irene Batebe, a petroleum officer in former Commissioner in the Petroleum DELAYS charge of refining at the Petroleum Exploration and Production Department Just three years to 2016, the proposed Exploration and Production Department (PEPD), notes that the Early Production start of production date, a lot is yet to (PEPD), is optimistic that the 2016/2017 Scheme visualized refining 4,000 bar- be done. For instance, government has target will be met. rels of oil per day, to meet the country’s not yet approved field development immediate petroleum demands. plans to pave way for field develop-

12 The Uganda Chamber of Mines & Petroleum The delays in the oil production process are hurting service providers like Multilines too; which have invested heavily in new equipment and machinery

Peter Lokeris, the state minister for Basin Development Committee have minerals has often attributed the delay been discussing how to reach a final to government’s caution as it seeks to investment decision but a conclusion ensure all safeguards are put in place to remains elusive for now. avoid the mistakes committed by other African countries in managing the oil Just three years “We need to reach a final invest- resource. ment decision as soon as a possible,” “We have to first put in place the legal to 2016, the Mugerwa said. and regulatory framework first, before we can move into production,” Lokeris proposed start of Government’s limited capacity has in says. The immensely frustrated oil the past been blamed for complicat- companies like Tullow which have production date, ing the situation. The enactment of been in Uganda for close to a decade the upstream Petroleum Act and the now, however feel it’s only fair that a lot is yet to be Midstream Act are likely to delay oil production begins sooner rather later production even further. For instance, so that they can start recovering the done. For instance, under the new law, the field develop- money they sunk in. ment plans from oil companies are sup- government has not posed to be approved by the Petroleum “As people who sunk in capital, we Authority of Uganda, a key regulatory have expectations and cost recov- yet approved field authority that is yet to be set up. ery. We should move faster,” Jimmy Mugerwa, Tullow, Uganda, Country development plans Currently, the ministry is still develop- Manager told an oil forum in April, ing the regulations to operationalize 2013. Mugerwa often cites the example to pave way for field the Petroleum (Exploration, Production of Ghana that discovered oil 2007 a and Development) Act, 2013 and then year after Uganda, but is already ex- establish the institutions the Act creates, porting crude. development. before it can embark on production. In early, a statement from Tullow reported For some time now, government and that Uganda was close to approving its oil companies under the Albertine field development plans.

The Uganda Chamber of Mines & Petroleum 13 Neptune remains undeterred Neptune’s Marilyn Hill – Hill

Once beaten, twice shy; so the adage industry here. Some of our former having huge stacks of cash for just goes. At least that’s how the wider employees, many of whom have this kind of outlay?) majority approach life and its numerous found work with other Ugandan oil challenges. For Neptune Petroleum companies, take with them experience There is no set formula. Every company though, this is a step that will not in the industry as well as on the job and has a unique way of dealing with be taken just yet. Of the companies university training with three masters different situations. In the oil industry exploring for oil in Uganda, the level university degrees and four it is generally not uncommon to drill subsidiary of Tower Resources Plc has bachelor’s degrees. several wells and find nothing. In suffered the most heartache; with the Kenya there were 37 wells drilled company calling time on its six years of Why would you be interested before their first discovery last year. unsuccessful exploration in the Rhino Camp Basin in northern Uganda last in Uganda? Aren’t you afraid of year. having your fingers burned again? There have been a lot of ups and downs in the nascent petroleum But instead of boarding the next plane We hope to bid in the next licencing industry of Uganda. What is your out of the country to say Namibia or round if it comes about soon. The take on the general outlook? to the Sahawari Democratic Republic upstream part of the oil and gas industry is a high risk business that where the company holds other more The general outlook going forward is exploration companies accept as a promising interests, Marilyn Hill, the about balancing the interests of the necessary business decision. Country Manager, Neptune, Uganda country, which owns the petroleum and her staff will stay put for now. She and those of the private entities that tells us why: What lessons can you share with are involved in supporting the country prospecting firms and the general but have their own key commercial You spent in excess of $50m in public in general in relation to interests as well. As the country is so an unsuccessful hunt for oil; what young in this industry, it is expected your unsuccessful oil-deposits that there will be some challenges and impact did the failure have on search? lessons to learn along the way. Neptune (Tower Resources) both short and long term plans? It was a good six years’ experience I think in general that the current working and building relationships operators and service providers are Neptune and its parent company, with all stakeholders and especially the frustrated with the delays in moving Tower Resources Plc, are experienced people of West Nile. Treating people forward. The proven oil reserves are explorers and were well aware of the well including employees, service sitting stagnant in storage tanks or in risks in taking on our licence in West providers and other stakeholders is the ground and commercial interests Nile. The universal success rate is key in attaining success in exploration require that the oil be sold to start to approximately two discoveries for every activities. Caring for the environment reap the benefits from their exploration ten wells drilled. We are still interested is very important too. Competent firms costs. The long wait for a refinery in exploring for oil in Uganda and have were hired to do our technical work and/or pipeline make the potential kept our small operation going to be and it was unfortunate that we did not revenue stream for businesses seem too ready for the next licensing round. find oil where we drilled. far in the future. They see countries such as Ghana which went from We choose to emphasize our successes How do firms like Neptune handle discovery to production in just three which included excellent community such a setback? (Or is it just a blip; years and wonder why Uganda has still programs, education of Ugandans no production after the first discovery and pride in our reputation in the oil with companies of your stature seven years ago.

14 The Uganda Chamber of Mines & Petroleum Since this was a discretionary exploration company with a regional Neptune has had its own run in requirement, we hoped that PEPD focus on sub-Saharan Africa. The with Uganda authorities; how have would agree that we could keep our Company holds a 30% working interest assets and return them if we decided in a licence comprising three blocks you resolved these differences? not to continue in Uganda. PEPD offshore Namibia through its operating refused to allow this and insisted on subsidiary, Neptune Petroleum During the six year term of our taking everything from laptops and (Namibia) Ltd., and a 50% interest in exploration licence, we had excellent office equipment to the razor wire three contiguous licences, onshore and relations with the Petroleum protecting our office perimeter. We offshore, in the Sahawari Democratic Exploration Department (PEPD) of the felt betrayed after having such a good Republic through its subsidiary Comet Ministry of Energy as well as other relationship. Petroleum Ltd. regulator s such as NEMA. There was a great deal of mutual respect in our We also have issues to rise with GOU According to the company website partnership with the Government of regarding our inability to continue to www.towerresources.co.uk, Tower Uganda (GOU). At the end of our claim our input VAT refund as provided Resources has traditionally targeted licence, we fulfilled all requirements for in our PSA after GOU changed the exploration licences, focused on Africa, under our Production Sharing tax law in the middle of our exploration where potential is thought to exist Agreement (PSA) except that we asked period. The agreement states that we by analogy to similar hydrocarbon to retain our assets as we wished to are protected from any changes in the provinces elsewhere. “This is a high continue as an operating company law which had a “material effect” on risk high reward strategy. The aim is to in Uganda ready to bid in the next our operations. This claim is ongoing. secure Licences before they attract the licencing round. The PSA states that interest of larger oil industry players,” all assets owned by the licencee shall About Tower Resources it says. The developments in Namibia, become the property of the government Tower Resources Plc is an AIM-listed, after the signing of Licence 0010 “if the government so desires”. London-based, independent oil and gas support this thinking.

Neptune drilling at Mvule-1 in Feb 2012 in Obongi

The Uganda Chamber of Mines & Petroleum 15 Ministry of Energy, State Minister Simon D’Ujanga and the PS Kabagambe Kaliisa. The Ministry is discussing a fresh round of licensing. Oil industrY The oil blocks in the Rhino Camp and in the Southern basin in the district of Kanungu are to be brought back to the table when the next round of licensing awaits new gets underway, Fred Kabagambe- Kaliisa, the Permanent Secretary in the Ministry of Energy and Mineral Development, has said. licensing round “We shall at an opportune time be promoting it for future licensing,” Kabagambe said, referring to the Rhino for a license in the next round. to bid for oil blocks in the country. Camp, otherwise known as Block 5. The licensing round, and the approval The Southern basin, once operated by of the companies’ field development Neptune Petroleum used to be in Dominion, is another area that Kaliisa plans, remains one of the biggest steps charge of the Rhino camp, which is feels has strong prospects for oil. in speeding up Uganda’s race towards located in the West Nile region. The “We are very optimistic about that area. oil production. company drilled three wells, Iti, Avivi, It should be a very good candidate for Already, government has agreed in and Mvule, but failed to find any the future,” he said. He was speaking principle with the oil companies to commercially viable oil deposits. to a group of media editors at Protea have a pipeline and refinery built at Hotel in April. the same time. Uganda is likely to kick After the exploration license of this area The next round of licensing is expected off with a 30,000 barrels of oil per day expired it was returned to government. after the establishment of institutions refinery, before raising that figure to Commenting on speculation over the like the Petroleum Authority. Under 60,000 at some point in the future. The prospect of the Rhino camp – some say the new Petroleum Act of 2013, the companies, on the other hand, will politics stood in the way of getting an Authority is expected to advise the export up to 120,000 barrels of oil in oil find there – Kaliisa said “There was minister during the issuance of a a pipeline every day. Kaliisa said this no politics. It was an issue of science.” license. Brazil’s Petrobras and Shell are formula “makes business sense.” Neptune retains interested in bidding some of the oil majors that are expected Uganda has discovered about 3.5

16 The Uganda Chamber of Mines & Petroleum billion barrels of oil. Of this amount, funds, although certain policies could about 1.2 billion barrels can be act as barriers. recovered. A total of 89 wells have been drilled so far, with oil being found For starters, the oil companies are in 77 of these. According to Kaliisa, the locked in discussions with Uganda asset value of Uganda’s oil is estimated Revenue Authority over the Value at $150 billion. Added Tax on inputs imported into the country. A lot of finished goods The gentleman’s agreement on a are expected to be imported into refinery and pipeline broke a long the country for the oil infrastructure running impasse on a subject that had network. URA is eying this as a source held back Uganda’s oil industry, and it of revenue. The oil companies want renewed hope of the country producing some reprieve. its first barrel of oil as early as 2017. Then there is the political posturing Big Prospects between Parliament and the Executive, which have in the past slowed down oil It has been a long journey, but 2013 activities. This means decision making is already shaping up like more processes, especially those that concern breakthroughs are underway. This the governance of oil, are caught in year, oil companies are expected to the middle of political infighting. This announce massive investment plans for hurts companies’ financial targets, and the future. slows down the pace to recoup their investments. To do that though, there will have to be an agreement in place with government However, the political showdown over the companies’ field development between the central government and plans. Under the field development Parliament is waning, if the smooth plans, the oil companies are to show passage of the midstream bill is how they intend to transport the crude, anything to go by. the technology they intend to use, just to mention a few. While the first upstream bill met stiff resistance when it was bought to The other critical component remains Parliament last year, the Petroleum the refinery. For government, getting an (Refining, Gas Processing and investor to build a refinery appears to Conversion, Transportation and be a herculean task. Storage) Bill 2012, sailed through without any hullabaloo. In 2008, it was recommended that East African partner states invest in one It was surprising because the midstream refinery, to be located in Uganda. It bill is important as it touches on Oil industrY was also recommended that this will be the sensitive aspect of the impact done on a public private partnership. of oil activities on the environment, The East Africa partner states would especially in areas like the Murchison take up a stake in Uganda government’s Falls National Park, Uganda’s biggest, 40% shareholding, leaving the rest to where a number of oil wells are found. the private investor. Eoin Mekie, the former General However, there has been little Manager of Tullow Oil Uganda, is commitment from the East African quoted in a report, Oil in Uganda, partner states over this venture. In fact, by Ben Sheperd, discussing the the Uganda government, through the sensitivity of oil on the environment. late minister of East African Affairs, “The difficulty with this development Eriya Kategaya, had written to his is that it’s spread over a massive counterparts in the other countries to geographical area: the basin is 160 rally behind the refinery. kilometres long, it’s a very long way from the market place, and it’s an There is renewed interest coming incredibly environmentally and social from top Asian countries, though, economically sensitive area,” he said. with government planning to issue an He added: “It’s not just developing the expression of interest soon, according actual technology for the wells; it’s to Kaliisa. The refinery is expected to getting the stuff to market that’s the cost $1.6bn. real difficulty.” The midstream law is expected to take care of these concerns. More money will be needed to develop the wider oil industry infrastructure too. Tom Okurut, the Executive Director Up to $10bn – more than half Uganda’s of the National Environmental current Gross Domestic Product - is Management Authority, says they needed for the infrastructure before have already drawn up an oil spill Uganda starts producing oil. Oil contingency plan to deal with any companies have agreed to unlock these threats.

The Uganda Chamber of Mines & Petroleum 17 BRIEFS G4S introduces new human rights policy

Weatherford confirms corruption probe Weatherford, one of companies operating in Uganda, has announced the United States authorities are investigating its compliance with the Foreign Corrupt Practices Act (FCPA) and other laws worldwide.

“We have retained legal counsel, reporting to our Audit Committee, to investigate these matters and we are cooperating fully with the Department of Justice and Securities and Exchange Commission.”

The company added that “As part of our internal investigations, we have uncovered potential violations of US law in connection with activities in several jurisdictions. We have been in frequent negotiations with the government agencies to resolve these matters, and although these negotiations have advanced significantly, we cannot yet anticipate the timing, outcome or possible impact of the ultimate resolution of the investigations, financial or otherwise. G4S, the world’s leading international security solutions group in the mining sector, has today launched a landmark global human rights policy, designed to safeguard the rights CAMAC completes data of its employees, support the communities in which it operates, and to ensure that its operational practices enable acquisition in Kenya it to identify and mitigate against human rights risks. CAMAC Energy has announced that Sander Geophysics Co-authored by Dr Hugo Slim, an internationally (SGL) has completed shooting airborne gravity and magnetic recognized human rights expert, and senior G4S executives, geophysical surveys on the Company’s Kenya onshore Lamu the policy will be communicated to G4S staff in 125 Basin Blocks L1B and L16. The data acquisition covers countries across the world. essentially the entire 12,129 square km in L-1B and the entire 3,613 square km in L-16 and satisfies the gravity and The policy and its related guidance aims to align the magnetic survey requirements for each Block under the company’s human rights practices with the ‘UN Guiding relevant PSAs. Principles on Business and Human Rights – 2011 and to introduce additional global guidelines for areas not The company expects to receive initial results of the shoot currently covered by existing standards. in the third quarter of 2013. Results will be used to optimise the placement of 2-D seismic lines by identifying faults, Existing standards such as the International Code of basement structures and intra-sedimentary volcanic layers Conduct for Private Security Providers and the Voluntary and/or intrusions. “I am pleased that we completed the Principles on Security and Human Rights are already acquisition of the airborne gravity and magnetic geophysical important standards for G4S and have been embedded into surveys in Kenya safely, on time, and under budget,” said the relevant parts of the business. Senior Vice President of Exploration and Production Segun Omidele. “Our geophysical team will now work with SGL to interpret the data and delineate optimal areas for 2-D seismic acquisition.”

18 The Uganda Chamber of Mines & Petroleum is holding companies back – many are also concerned about the gap Ernst and Youngparadox”: predict “While general fewer confidence oilbetween deals their valuation of potential in the state and outlook of the acquisitions and the prices sought The bi-annual Oil & Gas Global economy is improving, this is by sellers. For many companies, the Capital Confidence Barometer accompanied by increasing levels appetite for M&A has declined. Five highlights that nearly half (44%) of the of uncertainty about the direction of years after the financial crisis, many 152 oil and gas company executives travel of commodity prices in general executives are still waiting for more surveyed believe the global economic and oil and gas prices in particular. price visibility before taking action. situation is improving, up from 27% This is leading to a valuation That conservatism aside, oil and gas in October 2012. Notably, oil and disconnect which is delaying many respondents expect that global M&A gas companies are generally more transactions.” deal volumes will increase over the optimistic than the broader global The oil and gas sector has been one next 12 months, with 72% expecting sample of 1,600 respondents in 50 of the most resilient for M&A over the volumes to at least modestly countries. last five years. However, this survey improve. Expectations of the larger However, only 27% of the respondents sees a slight decrease in sentiment with global sample were broadly expect to undertake any M&A activity 27% of respondents now expecting to similar. in the next six months, a decline from pursue acquisitions over the next 12 six months ago. months, down from 28% in October Andy Brogan, Ernst & Young’s 2012 and 31% a year ago. Global Oil & Gas Transactions Advisory It is not just a lack of confidence in the Leader explains this business environment that “confidence

UCMP partners with UNBS, ISO

The Uganda Chamber of Mines and is to build capacity within each of Petroleum has been identified as the selected East African countries an “important stakeholder” in the (Kenya, Tanzania and Uganda), using implementation of Social Responsibility UNBS as the central pivot. The project initiatives. Uganda National Bureau will facilitate training, exchange of Standards (UNBS) is coordinating of experience and good practices the awareness campaign to create among partner countries on the awareness on the International Standard application of ISO 26000 in company ISO 26000 on Social Responsibility operations. ISO 26000 defines social (SR). responsibility as the responsibility of an organization for the impacts of its UNBS, which is charged with insuring decisions and activities on society and standardization and quality assurance, the environment that contributes to is carrying out this role, under the sustainable development. auspices of the Deutsche Gesellschaft Ben Manyindo, the Executive fur Internationale Zusammenarbeirt “Social Responsibility plays a vital role Director, UNBS. (GiZ) GmbH, on behalf of BMX, in Sustainable Development,” says Federal Ministry of Economic Ben Manyindo, the Executive Director, Cooperation and Development of UNBS. involvement and development, Germany. human rights, consumer issues, labour The seven core subjects of Social practices, fair operating practices and The project’s overarching objective Responsibility include: community the environment.

The Uganda Chamber of Mines & Petroleum 19 Mashonga gold fields, Bushenyi

Bushenyi and Kasese in late February.

“While my office is meant to oversee the entire western region – from Mbarara, Mining Industry all the way to Bundibugyo – it doesn’t have enough capacity to do so. A mere Shs100,000 in fuel for an entire month is a drop in the ocean when you consider the amount of movement required in adequately supervising the mining activi- ties in the area. As such, mining investors Needs Shake Up constantly under declare their finds which costs the state a lot in royalties and taxes,” notes Gideon Amunyo, the Inspector of Mines in charge of Western Uganda.

Amunyo also thinks its high time Uganda adopted the Dodd Frank Law, a USA leg- islation that aims to limit the trading of conflict minerals that have for long funded wars like that in the neighbouring Demo- cratic Republic of Congo. The “bag and tag” initiative requires U.S. companies buying from a region rich in minerals to ensure their supply doesn’t not come from areas controlled by armed groups or corrupt sol- diers. Since Uganda neighbours the DRC, it’s important that it adopts the initiative according to Amunyo, otherwise its miner- als like tin and wolfram (tungsten) become unattractive and are only smuggled out costing the country a lot in would be tax returns. Uganda will soon adopt the law according to top DGSM officials.

For the Kirwa Wolfram Mine located in the valleys of hilly Kisoro, the oldest and biggest of its kind, only minimal artisanal mining is evident seeing that for a while now it has been ensnared in an ownership dispute. Gerald Eneku, the Inspector of Mashonga gold fields, Bushenyi Mines, Kigezi Region believes the conflict would have been avoided hadn’t his advice A fact-finding trip to the mining areas in also have to contend with bad roads, lim- to compensate the original license holder western Uganda, organised by the Uganda ited or inexistent electricity to power the not been ignored by his superiors. Chamber of Mines and Petroleum (UCMP) intensive activities, land wrangles, miner- has discovered numerous encumbrances als smuggling and limited data amongst “My bosses were ill advised and forcefully that will need immediate attention if the others. reclaimed Kirwa. Now it’s in limbo because country’s mining industry is to have any- The excursion was aimed at gathering as the aggrieved party has since sued the thing to write home about. much data about the sector as possible so state for hefty compensation,” said Eneku. that UCMP could be better placed to lobby Apart from limited staff and equipment for adequate support to improve the in- The only active mine of significance in the plus inadequate facilitation at the - De dustry’s fortunes. The first of many similar vicinity is Krone (U) Ltd, which also sources partment of Geological Survey and Mines upcoming trips, took in the Western Ugan- wolfram. However, the rudimentary min- (DGSM) regional branches, mining firms da districts of Kisoro, Kabale, Ntungamo, ing methods it employs mean it continues

20 The Uganda Chamber of Mines & Petroleum Zhou Fei, sino minerals investments, Kabale to operate below capacity; a factor that it’s working around the clock to change with new equipment having recently been sought. A derelict road and a rickety bridge over a swampy area in the precincts of the mine also mean transportation is difficult. In addition, the only electricity that is used is that from expensive thermal generators; shooting the company’s operation costs through the roof.

“Our pleas to the government to have a workable road constructed and cheap electricity supplied have fallen on deaf ears over the years. This has greatly hampered us especially seeing that affordable financ- ing is also difficult to access,” says Rose Ru- gazzora, Krone, Managing Director.

The infrastructural inefficiencies too are what, Zhou Fei, Operations Manager, Sino Hima cement entrance Minerals Investment has to contend with as his company explores for iron ore in Buhara, Kabale. Water to be used during the drilling process is sourced 4km away; Deis Twine, the Production Superinten- ne for one, employs at least 800 people electricity is from expensive thermal gen- dent. both directly and indirectly, a factor that is erators while their current rig can only be praised by the authorities. reached on foot. As such the most impressive establishment in terms of infrastructure, unfortunately “By employing these people, Krone is not “We have only drilled in 3 places on our still remains the defunct copper mines only transforming their livelihoods, but 46sq.km exploration area as a result of at Kilembe. Fully facilitated with its own also indirectly curbing crime since it keeps these hindrances which is worsened by a electricity plant, workshops, housing and the youth gainfully occupied,” says Robert very hard rock that is difficult to drill,” says good roads (before the recent devastating Nabimanya, the Kabale District Security Zhou Fei. floods), all it needs is to finally have a cred- Officer. ible investor coming in to resuscitate it. In Mashonga parish in Bushenyi, where it Five companies have been shortlisted for For the Mashonga residents, especially the partners John Muruli’s Aine Hope Empire the same and a winning bidder should be tea farmers, they have Aine Hope and Sino to explore for gold, Sino is not faring any known by the end of the year. to thank for a much flatter and wider road better on the electricity and road network which also leads to the partner firms’ gold front. Going forward, acquisition of extensive exploration site. Next on the cards for the geoscientific facts such as airborne geo- area is a modern primary school from the Further west at Hima Cement in Kasese, physical survey data covering 80% of the same companies. a new eco-friendly plant plus additional country; geological and geochemical sur- deposits of raw materials have upped veys data together with mineral resources Hima Cement has on its part built a health the company’s stakes in the last couple of assessment data, Uganda is embarking on centre for its locals on top of offering free years. William Gumisiriza, the quarry man- a serious exploration phase concentrating male circumcision last year. Some excelling ager notes Hima is well set for the next on areas that have obvious anomalies. In school kids in the area have also gotten two or so decades as a result. A reliance all this though, exploration remains a very scholarships for further studies. on road transport however means costs in high risk investment. The coffee farmers too have Hima to that that regard will remain high. for the extra buck they earn from selling CSR coffee husks used for heating in the com- “A working railway network linking west- Despite the numerous hardships however, pany’s kilns - husks that would have other- ern Uganda to the Indian coast like it was it is worth noting that some of the compa- wise been thrown away. The small forests in the past would of course serve us and nies are in one way or another positively planted by Hima too in its restoration of other mining firms in the area well,” says contributing their host communities. Kro- the mined sites are also laudable.

The Uganda Chamber of Mines & Petroleum 21 Robert Nabimanya (L), the Kabale District Security Officer the workshop at Kilembe mines ltd listens to ucmp’s cathy at the Krone hosted dinner in Kabale

“There should be some stern Comments: measures put in place to en- For Catherine N. Wabomba, sure adequate investment is the Geotechnical Officer at sunk into such projects. Why UCMP, the inaugural fact-find- should a company be granted a ing trip has proved to be a valu- very valuable license and then able eye opener that puts in use archaic methods to explore perspective the level of invest- and mine? Mining companies ment and commitment that is need to emulate the oil com- still required to push the- min panies if they want to be taken ing industry forward. seriously,” notes Nyagabyaki. “We have on many occasions ___ _ been approached with ques- For Victoria Equipment’s Josh- The Chamber delegation meeting with Kilembe officials tions about mining operations ua Kaala, the trip was an eye- in Uganda but have always had opener; helping him clearly ap- to rely on the operators for in- preciate the intricate needs of formation. the industry which going for- ward should help him and his However, this information could company strategize how best not be relied upon confidently to offer solutions. because many of these compa- “Many small scale miners are nies are hardly supervised. The using very rudimentary tools idea is to gather as much first- yet digging up valuable miner- hand information as possible als. They would clearly increase about the country’s mining op- their fortunes with better erations which can reliably be equipment. A simple backhoe used to attract investment into wheel loader (at only $25,000 the sector. It is our duty as a second hand or $50,000 new) Chamber to strive to promote can boost a small scale miner’s the mining sector and we be- returns big time,” says Kaala, lieve that with our vast mem- whose company is a subsidiary bership we shall achieve the of Atlas Copos. For those who goal and hope that a few years cannot buy outright, they have iron ore drilling at sino minerals investments, Kabale down the road, this sector will the option of hiring the equip- be one of the biggest contribu- ment. tors to the country’s GDP.” Kaala thinks opening the trips _ _ _ _ up to the wider public will even According to Achelis Uganda be more beneficial seeing that Limited’s Business Develop- there are many mining op- ment Manager, Mr Michael portunities that could interest Nyangabyaki, whose com- many who are not necessarily pany deals in heavy machinery Chamber members. needed in the mining industry, feels that the exploration in------vestors should be compelled to Dickson Mwesigwa from Victo- modernise their works to rea- ria Motors believes in future it sonable standards. He thinks would help the touring service there is too much rudimentary providers more if the manag- work being done even by sup- ers of the mines that are to be posedly well-facilitated foreign visited have ready clear-cut in- firms which in the end not only formation demonstrating what denies service providers would help they would need. “That be work but also means the way, I have a better picture of investing mining company- re what deal I can broker with the alises dismal returns. miner, if any,” he added. gerald eneku, mines inspector, Kigezi region

22 The Uganda Chamber of Mines & Petroleum 1st Uganda, Mining, Energy, Oil & Gas Conference & Exhibition

SERENA HOTEL, KAMPALA, REPUBLIC OF UGANDA 28 - 30 May 2013

“Development through sustainable management of Uganda’s energy & mineral resources.” The Uganda Chamberof Mines &Petroleum

ORGANISED BY

23 Email: [email protected] Website: www.umec-uganda.com construction of a new plant at the Krone mine KRONE DEFYING THE ODDS

Incorporated in Uganda in 1999, Krone is a private limited company operating the Nyamuliro Tungsten Mine in Muko, Rubanda, Kabale district in South Western Uganda. Under the stewardship of Isingoma Amooti, the CEO and Rose Nuwagaba Rugazzora, the Managing Director it remains the major miner and exporter of tungsten (wolfram) especially with Kirwa in Kisoro next door in limbo. The Nyamuliro wolfram mine has been in existence since the 1940’s when it was first exploited by a one Bjordal, a Norwegian national. Due to the sudden death of the original prospector coupled with the political turmoil and a slump in global prices, the mine went into disuse in the late 1960’s (at the time in the hands of Continental Ores and Uganda Development Corporation) and was only revived when Krone obtained the site lease to resume mining activities in 1999. It hasn’t been an easy journey though, as Isingoma will reveal in this interview. A catalogue of hurdles like a not-so-welcoming local populace, a tricky swamp that makes accessing the mine nightmarish, loan sharks amongst others, have combined to test the owners resolve over the years. A burning tenacity though, has ensured that Isingoma and co defy the odds to give the company a fighting chance going forward. He expounds more on this fascinating story:

How would you describe the Krone tungsten mining experience inherited so to speak and continue to conduct their mining so far? activities.

We went into tungsten mining at Nyamuliro prematurely. We In the absence of organized mining, even the access road was didn’t have the required knowledge and have literally learnt on totally swallowed up by farming activities rendering access to the the job. Mining is a very capital intensive venture. A poor road mine strictly by footpaths. To reach the actual mine, a road once and insufficient electricity have been our major problems. The existed over a swamp. However, due to disuse and run off from letters from President Museveni instructing authorities to help heavy rains, it was washed away. A swamp therefore stands in plus the numerous promises have not materialized. the way and is now being crossed by use of dugout canoes.

Because of the dilapidated nature of whatever equipment Initially our personal efforts to fix the road in the swampy that had not been looted at the old mine, full-mechanized environs in the vicinity of the mine backfired because they were exploitation could not be started. In addition, over the years, the based on a faulty design. The Belgian constructor in charge had community in the vicinity of the mine had continued to carry originally thought an ordinary bridge over the swamp enjoining out rat hole mining and selling the products to speculators. The the road would do but within just two months, the structure had directors therefore, opted to start operations on a small-scale fallen apart. Prior to that, the government had tried to fix the test basis. In so doing, the over 300 rat whole miners were road itself but it caved in within a week, despite spending at least

24 The Uganda Chamber of Mines & Petroleum Shs600 million on Multiplex, to try and propel us (like a managers after identifying try to clearly understand the constructing firm. springboard) and enable us to the problem and studying their customers’ problems raise capital quickly. For now the project’s potential. and maybe allow them grace It was later discovered that the we have been merely scooping Subsequently it will earn more time in case they need it. For swamp was one of the arms of the tailings and processing from its future success. Banks instance currently, the heavy Lake Bunyonyi and hired divers them. should stop looking at ripping rains and landslides (in April realized that it was too deep off struggling businesses. and May) have disrupted our to even get to the bottom. The How have you solved the With mining, I would advise mining activities – so it would bridge debacle was very costly financing issues? that financing institutions be thoughtless of our bank if it and left Krone financially were to come in and claim we dented, and exposed to its have failed to perform. I can creditors. With the borrowed only vouch for Tropical and money gone without any “I would advise that financing Housing Finance Bank as very return on it, the bank swooped institutions try to clearly understand considerate institutions which in and auctioned off our $2m go out of their way to help a Kololo house and some other their customers’ problems and borrower realize their dream. property in 2002 to recover its money. We were small petty maybe allow them grace time in Have you tried to partner businessmen then with limited with say foreign capitalized knowledge in mining. The old case they need it” individuals and companies? mines had been mishandled by the locals, the houses In the past we have tried destroyed and equipment to bring in several foreign stolen – which naturally set us Currently, we have some bit Its true mining has a lot of partners with impressive CVs back. And with an increasingly of money from Tropical Bank. disasters, but if I can clearly but unfortunately we have stable economy, it was difficult In fact Krone is very indebted demonstrate my struggles to later discovered that many to keep up with the Indian to Tropical which has gone my bank, and ask for more are just quacks after a due and Chinese competitors beyond being a mere financier time, I would expect to be diligence. who came in with big capital to a partner – it clearly helped. Bankers should go and global contacts. Without understands its customers and beyond eying interest on their What about requesting ready, cheap financing, mining goes out of its way to help loans and act like ‘doctors of government for subsidies? is a difficult area to venture them realize their dreams. Our businesses’ – because that is Other than giving us adequate that can cause one immense old financier, dfcu bank, didn’t what they are. As a doctor, power and an efficient road, stress. give us a chance – all they they should be prescribing there is nothing more we were interested in was selling an alternative treatment, would want from government. How did you recover? the house we had staked as instead of discharging you All we need is an enabling collateral yet we had clearly from hospital. I believe there environment. The rural Later, the floating bridge demonstrated a willingness to are syndicates involving the electrification program concept was tried out and make this work. Our struggles auctioneer, the valuer and seems to have put us in it worked pretty well and with the road and bridge were some bank officials to sell off consideration because the it’s what we are using to well documented but dfcu property staked as collateral lines are passing in our vicinity date. There is a possibility ignored our pleas for more for their selfish interests. They and we have been visited by of another road across but time and just rushed to sell even declare less for what the government officials to we haven’t tried it out yet our house (below its value) they have sold the property establish how much electricity seeing that landslides have and the equipment we had for, leaving a borrower bare we would need. in the past washed away the recently acquired. and spent. But if they could older roads. Because of the come in and identify the But again, having experienced previous bad experiences, we Mining, like you have also problem study the project’s firsthand how capital decided to look for a simpler acknowledged, is very capital potential, they can even put intensive mining is, maybe and faster way of recovering. intensive and highly risky. in more money and earn government can consider The quickest way to get a Maybe this is why some more in interest – but they selling licenses together return on any new investment banks are apprehensive when don’t. If a mine is struggling, with thorough prospecting was to deal with the tailings it comes to lending miners. a reasonable bank can even data. Hiring competent (ore residual). Currently, we How can banks work with choose to recapitalize it and prospectors can cost in excess only have an interim plant miners fruitfully? bring in more experienced of $2m oftentimes. If the Department of Geological Survey and Mines would have an office dedicated to prospecting, it would go a long way in developing the industry; as investors would wholeheartedly commit their cash to the actual mining. A fee can be paid for a positive report but if there are no viable deposits found, government can cushion the loss.

Some heavy equipment dealers like Victoria Engineering have hire purchase packages for your like. Have you examined these options? Before we venture into borrowing one has to know their capacity to pay back. Like I mentioned before, we lost our property in Kololo, and this experience has taught us that we need to go slow. When our production lines are stable, and we understand the trends of the trade very well, then we will indeed borrow when Krone ceo isingoma amooti the need arises. years. experience over the years has revealed Many a licensed company has struggled a readily available market in view of the Immediately the tailing plant is available to deal with local inhabitants on their wide variety of use to tungsten can be and our purse is bigger, we will start mining area – who at times can be applied. In addition, world market prices doing our own mining. The rains are hostile. How has Krone addressed this are relatively stable. With the experience really disruptive and have slowed down seeing that the mine had been illegally since gained at the mine, the operating the establishment of the new plant so I occupied since the 1960s when it closed? costs have increased on the whole cannot be certain exactly when we will because of the bigger volume of business. be ready. So far we have invested around People have been empowered beyond However the actual pro-rated operating $1.2m in the mine. The company is their wildest dreams in recent years. cost has greatly reduced, resulting into a committed to improving its image in the Every day we see ordinary people higher net profit to sales ratio. community especially since the successes involved in running battles with police even when they are in the wrong. So to avoid people destroying your property “If government would have an office dedicated to and hostility, you have got to adjust and bend the rules to accommodate them. prospecting, it would go a long way in developing When we came in, we found locals the industry; as investors would wholeheartedly carrying out unlicensed mining on the land and to avoid clashes we had to find commit their cash to the actual mining” a suitable way of accommodating them. We have just over 100 core employees There are new developments taking of the company’s activities are better who have a sort of Local Council system place on your mine, what are your trying reflected in the improved welfare of the – with chairmen and councilors – where to achieve? community. These are in addition to everyone (usually relatives) is looked after. providing employment and the inevitable We identify a spot, the locals come in, Currently we have a mini-plant handling benefits to society of a full weather road mine the area and we buy through their the tailings. Krone has laid a solid deep into the rural area previously served head who subsequently distributes the foundation for the future by investing in by footpaths alone. In 2009, Krone won money amongst them. state of the art equipment and developing an international award for Excellence in the talent of the people who will steer Products and Service presented by the Going forward, we will divide the mining the company into the future. The majority Trade Leaders’ Club to distinguished firms area into two; with our new mine of the miners and the technical team are of every Industrial branch whose products occupying one side and the locals on the locals who are apply supplemented by a and services have deserved universal other. In the past, 3 people have died in few expatriates with a rich knowledge in acclaim along the course of the year. This clashes here and we don’t want to see a mining. demonstrates the firm’s determination repeat. Some families going back 3 to 4 to become a world class company in all generations have always considered the We have in place a work program which aspects. tungsten mine their source of income so will involve opening up the tunnels and we can’t throw them out just like that putting in rails, ventilators and therefore About Krone – though the law would be on our side. a proper mine. Currently our production The company’s head office is located We are also considered immigrants in the numbers as erratic; the workers target at Umbwa Kali House, Weraga Road Kigezi area, so naturally they disown us. the rich spots also called pockets and in Kabowa, Kampala. The 176 hectare may mine 200kgs today, tomorrow tungsten mine is at Plot 6; block 182 What is the present state of the 900kg and the next day zero. Since we Nyamuliro, Muko in Rubanda, Kabale company? started consistent operations in 2004, we district. It is situated 40km out of Kabale The Directors initially made a logical have averaged 106 tonnes per year. We town along the main Kabale-Kisoro road. decision to start operations more on a test recover 2.2kgs of the mineral per tonne Kabale town is in the South Western of basis as they assessed market response of tailings. Estimates show that the mine Uganda. It is 420kms from the capital in addition to the operating costs. The should still be operative for another 20 Kampala.

26 The Uganda Chamber of Mines & Petroleum Banks prepare to spend big on oil …as economist cautions on an extractives’ dependent economy razia Khan, the Head of Research, Standard Chartered Bank Africa

Standard Chartered Bank is set to open billion barrels of oil from less than ratio will increase with oil,” she said. up a branch in the oil-rich region of half the identified exploration area. Of The manner in which oil revenues are Bunyoro in Hoima district as financial this, only 1.2 billion can be recovered, to be invested is part of the debate institutions position themselves to tap although the authorities believe that surrounding the Public Finance into the various opportunities that have with better technology the figure can go Management Bill, which is expected for been unearthed as Uganda gears up to up to 1.7 billion. another round of debate in Parliament become an oil producing country. soon. The bill seeks to combine a To get to the production stage, number of Acts into a solid piece of The announcement by StanChart, a expected somewhere between 2016 legislature that will strengthen public bank that has less than 15 branches and 2017, the country needs to invest expenditure, among others. countrywide (with most located in the at least $10 billion, according to capital Kampala, despite being here for government officials. It is this finance There is debate whether oil revenues, over 100 years), shows just how crucial that has got banks excited about the should, for example, be placed under the oil industry is to the economy, and prospects of the oil industry. a separate budget. Those who argue the role the financial institutions intend for a separate budget believe that the to pay to support it. Razia Khan, the Head of Research, oil revenues are likely to be so huge Standard Chartered Bank Africa, calls that combining them with the rest of “There are huge opportunities for the for caution however. Instead, she warns the resource envelop would distort financial institutions. Infrastructure, the against the oil resources being used as the management of the country. The roads, the SMEs are coming into play a pillar to drive Uganda’s economic proponents of the separation also to cash in at the oil industry and it is growth. believe that it will be easier to track the the banks that are supposed to finance “Countries like Uganda shouldn’t oil revenues. these projects. Already, Standard entirely depend on the oil revenues for Chartered is planning to put up a growth. It’s bad to be overly dependent Technocrats at the Ministry of Finance branch in Hoima. Oil is big business for on oil revenue,” she said recently in feel that should not be the case. “There the banks,” James Mutuku, the Head, Kampala. is a certain sexiness about oil.I wonder Financial Markets at the bank said why,” said Finance Minister Maria recently. To support her point, Khan offered the Kiwanuka, emphasizing that “oil should example of Botswana; a country she be treated like any other resource.” Other banks like dfcu have set up a notes as a key producer of diamonds, special desk specifically to deal with has saved much of the wealth from The Ministry of Finance argues that the financial issues for investors within its mining industry to act as a buffer if, for example, Uganda discovered the oil and gas industry. Citi Bank has against any unforeseen risks. another resource far worthier than oil, promised any investor looking for large Khan advised Uganda to “focus on should there then be another budget packages of finance within the oil resource mobilisation from the rest of specifically for the newly discovered industry to simply get in touch. United the economy and not just oil,” arguing resource? Bank of Africa on the other hand, says that oil is a finite resource that will be Whichever school of thought carries the its experience in other African countries depleted. day, the most important thing will be blessed with oil and gas will serve it in whether the resources can be managed good stead in Uganda. “It is much better to re-invest the according to the set rules. revenue. It is bad for an economy of the In the meantime, Khan says massive Uganda has so far discovered 3.5 potential of Uganda to say our revenue investment is on the way, and this

The Uganda Chamber of Mines & Petroleum 27 Bank of uganda

comes with widespread effects. Khan says Uganda should brave for remains optimistic about Uganda’s “trade deterioration.” This means that prospects. She advises: “Don’t allow “There is an investment story behind in the short term, imports, mostly in the your expenditure to balloon and don’t oil production in Uganda. As we start form of machinery being brought into make your government expand because to see Uganda progressing towards the country, will far outstrip exports. you have oil.” oil production, there is going to be When that happens, it means that enormous investment especially in- inflationary pressures, the spark behind Reflecting on the 3.5 billion barrels terms of infrastructure construction,” the increase in the prices of goods and of oil Uganda has discovered so far, she said. services, are bound to intensify due to Khan said: “It’s not going to be Nigeria, imported inflation, and there could be Angola, or Libya, and maybe that’s A refinery and an export pipeline are heavy disruptions in the forex market, the good news that the oil reserves we expected to consume about half of among others. are talking about are still relatively too the $10 billion that is expected to be modest and the economy like Uganda invested in the industry. The bigger effect could, however, come shouldn’t completely pitch the growth Due to this investment programme, if the resources are mismanaged. Khan picture [onto oil].”

28 The Uganda Chamber of Mines & Petroleum Handling petroleum insurance challenges How Uganda’s insurers can tackle the intricate oil & gas industry By Munyaradzi Daka lead to huge unprotected the industry. To guard against It is my belief that this model exposures which put the such scenarios the regulators Any major investment is what will be pursued by affected companies and the can limit the capacities of the demands comprehensive the local Ugandan insurance whole industry at risk. Any local underwriters to say 5% protection for the regulators obviously adjusted significant loss experienced of their shareholder’s value. shareholders’ peace of mind. accordingly to meet local by the written business in This will mitigate against This is particularly critical conditions. This sort of this situation will likely severity losses associated in the oil and gas industry framework is beneficial to cause the demise of the with this industry whilst where investments are in the the industry as it encourages underwriting company with having a capped limit of their billions of dollars. Protection growth and retention for the a resultant domino effect in aggregate capacity to prevent at the same time allows the against accumulation issues. organization to concentrate “In coming up with the thresholds of local on their core business. At the same time the oil and Insurance plays a major role business retention and offshore placement gas treaties or placement in providing this protection arrangements employed by and give that peace of mind. rules the regulator should balance this oil and gas insurers should be need for local retention with the ability to scrutinized to avoid obvious It is common knowledge that accumulation scenarios. The the local insurance industry is sufficiently cover resultant losses…” most common arrangements working on frameworks and offered by the overseas oil products to be able to serve local industry. There are of loss scenarios and prudent and gas underwriters are the petroleum industry. In however some dangers that purchase of covers from ‘excess of loss’ programs most African countries Nigeria come with these kinds of international reinsurers. It which are programs that make being a reference, there is frameworks in new oil and also requires a highly skilled the underwriting insurance regulation on how insurance gas markets. oil and gas insurance staffing company responsible for of oil and gas business should in the local companies which usually up to $2m of any be conducted. This regulation Losses in oil and gas are also take time to develop. loss before the reinsurance is mainly to protect the flight usually high in severity and company starts paying. An of insurance premiums from mostly catastrophic though It is very critical that in drafting accumulation of just 3 or the country and to provide for low in frequency. It is their guidelines for writing more series of claims will accountability. The regulation therefore imperative that the of oil and gas business, the lead to the collapse of the as it stands currently prohibits insurance companies have local regulator is aware of said company. offshore placing of insurance enough capacity to deal with the inherent dangers that the business without prior the expected losses. Usually insurance of this business can In conclusion, it is advisable approval of the Insurance this capacity is provided present. The officers in the that as it readies itself for the Commissioner. The Insurance by foreign international Insurance Commissioner’s expected boom in premiums Commissioner if he assents specialized companies as the office should be well trained with the impending oil to the request can only allow sum insured values involved in the operations of the oil and and gas business, the local 30% of the business to be are normally in excess of what gas underwriting for effective industry is aware of the placed offshore should there the local market can provide. monitoring and auditing. inherent challenges of the be no local capacity to retain Building the local capacity business and at the same time 100% of the business. requires careful projections In coming up with the also take the opportunity to thresholds of local business develop capacity in a well retention and offshore thought out and structured placement rules they should manner. It is also advisable balance this need for local for the regulators to allow retention with the ability to a gradual capacity building sufficiently cover resultant for the industry until the losses. At the same time requisite skills and capacity there should be a gradual are achieved and the local and deliberate policy which industry can take full allows capacity building in advantage of the opportunities the industry. presented by the petroleum industry. As the attraction of huge premiums in the petroleum The writer Munyaradzi Daka industry lure the local is an Insurance Consultant, companies, they will scramble who until recently was to attain and retain as much a technical expert at the premiums for their books African Management often times disregarding the Services Company (AMSCO) prudence which is required in Nigeria. insuring against oil spills, like this Bp in underwriting according Email: munyah2001@yahoo. one in the gulf of mexico is very costly to what their balance sheets co.uk can accommodate. This will How To Develop Local Content By Eeshi Katugugu and industrial training. The for Uganda to benefit from academic qualifications, Government plans to utilise oil the petroleum resource. the oil company employing Following the confirmation of and gas activities to support It is also an indisputable the expatriate must existence of commercial oil provision of necessary training fact that capacity building demonstrate that the reserves in Uganda in 2006, to Ugandans both in the in the sector can only be skills that the employee the Government of Uganda public and private sectors and achieved if there is proper possesses are not available formulated the National to develop skills during the monitoring and enforcement in Uganda; Oil and Gas Policy of 2008 implementation of oil and gas of compliance with provisions (the Policy). The Policy was activities. According to the of the Agreements signed • Proof that there are no designed to provide for the National Oil and Gas Policy, between the oil companies suitably qualified Ugandan appropriate and efficient the Petroleum Exploration and and the Government. It is nationals to fill the position management systems for the Production Department (PEPD) expected that the PEPD’s being offered to the oil and gas resource in line of the Ministry of Energy involvement in the process foreign employees. The with the country’s Poverty and Mineral Development will provide a mechanism proof required is usually Eradication Action Plan (PEAP). (MEMD) is responsible for the for the Government to keep in form of advertisement Both the Policy and the PEAP implementation and regulation track of how many Ugandans in the local media and an are aimed at creating lasting of petroleum resources in are employed in the sector, evaluation report on the value to the country. Uganda. their positions, training being candidates that responded offered to build relevant to the advertisement. The In addition to the revenue In order to ensure national capacity, outcome of such report should also contain expected to be created by the participation in the oil and gas training and technology a signed attendance list of oil and gas sector there are sector, the PEPD has taken transfer, and actions that all Ugandans who attended other significant benefits for on its mandate of monitoring the Government should take the job interviews to Ugandans such as creation of the activities of oil companies to further enhance capacity ensure that qualified employment across the value by actively getting involved in building. Ugandans who applied chain and skills transfer. One the process of employment were properly evaluated; of the objectives of the Policy of expatriates. In this regard Through regular monitoring, is to ensure optimum national in October 2012, the PEPD the Government will also • A copy of the succession participation in the oil and gas issued revised guidelines for be able to assess the oil plan formally approved activities and to support the application of work permits companies’ compliance by the Government which development and maintenance and special passes in the oil with their commitments for includes the succession of national expertise. National and gas sector in Uganda. It training Ugandans and then periods. The purpose of participation through should be noted that prior to work collaboratively with the the succession plan is to capacity building in the oil 2011, applications for work companies to address any ensure that each foreign and gas sector is one of the permits for employees in shortcomings that may be employee is training key avenues for achieving the oil and gas sector were identified in order to enhance Ugandans who will take the desired lasting value in made to the Directorate of capacity building. over the jobs held by Uganda. Immigration without any foreign employees after an involvement by the PEPD. The According to the guidelines agreed period; and It is intended that the new guidelines are in line with issued by the PEPD, in order for national participation the regulatory framework and an expatriate employee to be • Applications for work objective will be achieved the Government policies aimed issued with a recommendation permits and special passes in many ways including: use at enhancing national content to be granted a work permit, should be made prior of local goods and services; and national participation the oil company must provide to the foreign employee ensuring participation in the sector. Involvement the following information: entering the country. of local entrepreneurs in of the PEPD in work permits • Proof of academic This requirement is in providing goods and services process is a necessary step in qualification which accordance with the in the sector; promoting order to monitor and evaluate include certified academic Uganda Citizenship and employment of Ugandans achievements in capacity certificates and/or Immigration Control Act in the oil and gas sector; as building among Ugandans in transcripts of the foreign which requires any person well as transfer of skills and the sector. employee. This is despite intending to take on technology to Ugandans. the fact that the oil and employment under entry The Government has given gas industry is a skills permit class G (Employees) The Government has made a priority to employment and based industry and not to only enter Uganda after deliberate effort of identifying training of Ugandans in the necessarily dependent on his or her application for skills required in the sector sector because it recognises academic qualifications. the entry permit has been and made plans for developing that capacity building among For those employees granted. these skills through formal Ugandans is a must in order who do not possess Restriction on employment of

30 The Uganda Chamber of Mines & Petroleum foreigners is widely practiced for more Ugandans, skills (Authority). The Act will financial support for educa- in the modern world including and technology transfer, strengthen the requirement tion. The oil companies are in developed countries. economic growth, and so on. for national participation by also required to commit to Uganda is therefore not alone Skills, experience and ability employment of Ugandans in maximisation of knowledge when it comes to restricting to perform the job should the oil companies as well as transfer to Ugandans and to employment of foreigners. therefore take precedence in businesses that provide establish in Uganda, manage- Every sovereign country has in recruitment if Uganda goods and services in the ment and technical capabilities special obligations they owe is to fully benefit from the sector. Companies in the oil and any necessary facilities for to their citizens including petroleum resource. and gas sector are expected technical work, including the protection of their economic to facilitate participation interpretation of data. interests. These obligations of Ugandans through In order to fully achieve the may include giving special employment and provision The Petroleum (Refining, Gas national content ambitions, considerations to its own of services in sectors of the Processing and Conversion, the Government has put in citizens such as first preference economy which are necessary Transportation and Storage) place the necessary regulatory to fill job vacancies. For for supporting the sector. Act, 2013 also passed by framework for implementation example last year Kenya The guidelines released the Parliament in February and enforcement of national introduced what some by the PEPD are therefore contains similar provisions content. The Government consider extreme restrictions aimed at enhancement on employment and train- is also in the process of on employment of foreign and enforcement of ing of Ugandans as those in identifying more opportunities nationals with age and salary implementation of national the Petroleum (Exploration, for national content in the oil restrictions among others. participation in the oil and gas Development and Production), and gas activities and planning The new restrictions require sector in Uganda. Act 2012. for implementation. Under work permits to be given only the new legal framework to those foreigners over the According to the new Act when Compliance with the local licensed oil companies and age of thirty five years making the Petroleum Authority is content requirements is a their subcontractors will more than US$24,000 annually. condition precedent to obtain- ing work permits for foreign According to the restrictions “The licensees, their contractors employees in the oil and gas foreign medical, accounting, and subcontractors in all phases of sector. It is therefore important engineering, legal and that oil companies include in real-estate professionals petroleum activities are required to their work plans local content are banned from practicing programmes that they are in Kenya. In Ghana, an train Ugandans and submit a detailed implementing and ensure investment ranging from USD programme for recruitment and compliance with the laws and $10,000 to USD $100,000 any other applicable guide- entitles the enterprise to training of Ugandans within twelve lines issued by the MEMD in two (2) automatic visas/work months after the grant of a licence…” order to ease the process of permits. An investment of USD getting work permits for their $500,000 and above qualifies employees. an enterprise to have four (4) be required to provide on in place it will take over the expatriate employees. The job training to Ugandans functions of monitoring and The good news is that since enterprise may apply for extra employed in the sector; as regulating the exploration, de- the introduction of the new visas/work permits, but the well as formal training paid velopment and production of guidelines, we have witnessed investor must justify why a for by licensed oil companies. petroleum. The Authority will a remarkable improvement foreigner must be employed It is expected that licensed oil also take on the responsibility in the time the Directorate rather than a Ghanaian. companies will provide direct of ensuring that the licencees of Immigration Control takes employment mainly for science uphold laws, regulations, rules, to process and grant work The guidelines introduced by professionals, engineers, and the contract terms. The permits in the sector. This the Government of Uganda and technicians. The sector licensees, their contractors and is because the Government though different in nature from will also provide a lot of subcontractors (oil companies) recognises the importance the restrictions introduced by indirect employment through in all phases of petroleum of the expertise brought to Kenya and Ghana, have the companies that provide goods activities are required to train Uganda by expatriates in same objective which is to and services to the oil and gas Ugandans and submit a de- the oil and gas sector. For ensure that locals fully benefit sector. tailed programme for recruit- this reason work permits for from the oil and gas sector ment and training of Ugandans employees in the oil and gas through employment and skills The Policy and the new within twelve months after sector are given a priority and transfer. On the other hand, regulatory framework namely the grant of a licence, and fast tracked. It is therefore restrictions on employment of the Petroleum (Exploration, on each subsequent anniver- important that the oil and foreigners in the sector should Development and Production) sary of such grant. Where a gas companies are compliant be implemented prudently Act, 2012 (the new Act) programme or a scholarship with employment guidelines to facilitate fast admission of passed in December 2012 will proposed to be awarded under so that they can obtain the highly skilled and experienced provide a legal framework the Act has been approved, the recommendations from the foreign workers who will for implementation of oil companies will not be per- Ministry of Energy and have transfer skills to Ugandans. As the requirements for mitted to vary the programme the work permits issued in the the Government implements capacity building through without permission. The licens- shortest time possible. This these restrictions there is a employment of Ugandans ees are also required to submit cooperation will be beneficial need for dialogue with the and skills transfer. The new a report on the execution of to the contractors and oil companies to agree on Act which commenced on the programme. subcontractors and the people what is best and practical for 5 April 2013 repealed the of Uganda as a whole. both sides. If employment Petroleum (Exploration and In addition, oil companies restrictions on foreigners are Production) Act, Cap 150. are required to have a clearly The writer Eeshi Katugugu, reasonable, Uganda will attract The Act operationalised defined training programme is the Manager Tax Services, more investments which in the National Oil and Gas for training Ugandans either PwC. Email: eeshi.katugugu@ the end mean employment Policy and established the in Uganda or abroad through ug.pwc.com Petroleum Authority of Uganda scholarships and other

The Uganda Chamber of Mines & Petroleum 31 Chamber Pictorial The Victoria Motors Cocktail at Silver Springs Hotel

the ucmp stall at the indaba in south africa

32 The Uganda Chamber of Mines & Petroleum Chamber Pictorial Total E&P workshop with service providers

The Uganda Chamber of Mines & Petroleum 33 MEET THE LADIES holding their own in the oil industry

In a country where customary dogmas still ring loud, it is subjects in the field of Petroleum Engineering and the like, important that efforts by traditionally sidelined groups to especially in developing states like Uganda. As such, in a series disregard the status quo are highlighted and celebrated. Like of articles over the next edition of the Chamber magazine, we Tullow Oil spokesperson Cathy Adengo notes, it is often times will turn the spotlight on the ladies who are holding their own difficult for women to be taken as seriously as men on technical in Uganda’s oil and gas and mining sectors:

Marilyn Hill, Irene Nakalyango, Country Manager, Neptune, Uganda CEO, Uganda Chember of Mines & Petroleum “I am an ordinary person who The effervescent Irene Ivy Nakalyango had the good fortune of being is now in her second year as the trusted to establish Neptune’s Uganda Chamber of Mines and operations in Uganda and Petroleum, Chief Executive Officer. I was given full support to Nakalyango is charged with running make community programs the day to day operations of the over and education of Ugandans 100-member association. And this is no priority endeavors. I am proud of our achievements easy task, considering that the UCMP to date,” says Marilyn Hill, looks out for the best interests of all Country Manager, Neptune, the major players in Uganda’s oil, gas Uganda. and mining sectors; while seeking to promote responsible exploration all Hill, who thinks a lot targeted towards the country’s social should not be drawn into and economic transformation. what women are doing vis-à-vis their male counterparts, believes young Ugandan women should never feel that the “My job involves taking the lead in delivering stakeholder value and petroleum industry is exclusively a male club if they are to taking responsibility for the organization’s professional growth and make inroads in the sector. performance. This may mean petitioning Parliament on the petroleum legislation and meeting with the Ministry of Energy and Mineral “If they perceive this bias, then they will never succeed. Development officials amongst other government authorities to In the oil companies operating here as well as at the Petroleum Exploration and Production Department and negotiate for the best reasonable playing field for our members,” says National Environmental Management Agency, there are Nakalyango. many women successfully carrying on meaningful work and being compensated the same as men for work of equal No mean feat, one must say. value,” says Hill. Graduating with a Bachelor’s Degree in Mechanical Engineering at Makerere University in 2008, Nakalyango’s interest in all things Adding, “I am more concerned with Ugandans of both underground was first tickled by a scholarship offer to Nigeria for sexes perceiving that it is a foreigners’ industry. I think that a graduate oil & gas management training in 2008 with Orwell integration of Ugandans into the industry is moving ahead International. Living in Port Harcourt, Nigeria’s foremost oil town, and with training and further education we will have both her career path was set as she picked up an understanding of the oil Ugandan women and men fairly represented.” and gas industry operations, business communication, leadership, planning among other vital skills! Hill has also worked on the Presidential Investors Round Table (PIRT) for five years and as Chairman for the last two. On return to Kampala in 2009, she joined Orwell’s Uganda subsidiary “I was privileged to work on the PIRT. Furthermore, the as the business development officer before volunteering to help work that we have put into helping reinvigorate the Uganda out at the Chamber with day to day operations. An appointment Chamber of Mines and Petroleum has also been extremely as an advisor to the UCMP board, followed her appointment as the satisfying. So in total my six years working in Uganda have Chamber’s CEO after impressing the board during her volunteering been extremely rewarding,” she says. streak.

“It’s been hectic, but I try to take it, one day at a time! I see the Chamber growing into a leading association that all its peers will want to emulate. With the team and council we have here, all focused on adopting the best practices available, only the sky can be the limit,” says Nakalyango.

34 The Uganda Chamber of Mines & Petroleum Irene Batebe, PEPD Though she insists that she is Department,” she says. nothing but a regular lady, a job About whether she hasn’t felt she has to outdo herself to gain involving being part of a team recognition in a male-dominated sphere, Batebe says: “I have of professionals to ensure that never seen being a woman as a stumbling block to what I can Uganda achieves its goal of achieve. I would like to remind the girls and women out there developing a refinery to convert that God has given them great potential that is waiting to the crude oil discovered in the be exploited. Young ladies should not shy away from science country into useful petroleum subjects like physics, chemistry and mathematics. This will be products like petrol, diesel and your stepping stone to the petroleum sector. Do not allow to kerosene is far from the standard. curve out your abilities and ultimately your destiny based on society myths and stereotypes. The sector has several ladies who “My work revolves around are contributing greatly to its running. If others have made it, so reviewing technical designs for the can you.” planned refinery, participating in formulating legislation to govern Furthermore, she believes if women excel in their work and the midstream petroleum section, and promoting the refinery develop the necessary skills and values, such as, integrity, project to prospective investors, among others,” says Batebe. leadership and interpersonal skills there can be no reason why they should be denied the opportunity to lead the petroleum Having completed her secondary education from Mary sector. Women should endeavor to attain the required skills for hill High School, Mbarara, Batebe undertook a Bachelor of the job by going back to school. Science degree in Chemical and Process Engineering at the University of Dar es salaam, Tanzania. This was followed with “Always thirst for knowledge by reading good books that will a Master of Science in Sustainable Energy Engineering at the contribute to your personal growth,” Batebe advises. Royal Institute of Technology, Stockholm, Sweden. Following which, she commenced work with the Ministry of Energy and Uganda’s oil and gas sector has great potential with Ugandans Mineral Development as a Chemical Engineer in the Midstream developing the necessary skills to handle the increasing work in Petroleum Unit. Batebe later took off a year from work (in the sector, she says. 2010) to pursue a MSc in Refinery Design and Operations at the University of Manchester, UK. “More Ugandans are increasingly participating in the development of the sector through either providing services or “I am very privileged to work with a very dynamic and direct employment. This should be an exciting time for us all as professional team at the Petroleum Exploration and Production this sector will definitely contribute to transforming our country,” she concludes.

Irene Muloni, Minister

The third ‘Irene’ on this list is also of Business Administration (MBA), from Capella University in the most highly placed woman in Minneapolis, Minnesota, USA. the petroleum industry. She is also a Certified Public-Private Partnership Specialist, accredited by The Institute for Public-Private Partnerships, As the Minister for Energy and Inc. (IP3) and the Water, Engineering and Development Centre Minerals, the Bulambuli Woman (WEDC) of Loughborough University. MP Representative, Irene Nafuna Muloni is clearly the most From 2002 until 2011, Muloni has worked as the Managing recognisable role model for many Director of the Uganda Electricity Distribution Company Limited a young lady that harbours dreams (UEDCL). of working in the oil and mining After winning the Bulambuli District Women’s Representative MP industries. seat in 2011, she was appointed as Energy Minister that year. Muloni is an advocate for gender equality, women’s The 52 year old holds In 1982, empowerment and utilization of science and technology for Bachelor of Science in Electrical sustainable development. Engineering degree from Makerere University and a Master Tullow nudges women in the right direction

Joan namukasa and susan musiime

As part of Tullow Oil’s commitment to promote Scotland, England, Ghana, France and the USA. The capacity development of Ugandans in Oil and technical trainings and mentorship opportunities Gas, the company has made tremendous strides they have received have not only empowered in supporting Ugandan women in high skilled them as individuals, but are nurturing them into and specialized roles that will see them involved well groomed female engineers instrumental to in the growth of Uganda’s oil and Gas future. the country’s national development,” says Tullow Among the key capacity and development Uganda’s spokesperson, Cathy Adengo. training programmes, Tullow embarked on a Adding, “It is often times difficult for women to be graduate engineering programme in 2010 that taken as seriously as men on technical subjects in enrolled three young talented Uganda women the field of Petroleum Engineering and as such, pursuing careers as petroleum engineering. it is important for our young female talent prove The three skilled ladies; Joan Namukasa, Susan their technical abilities which Tullow Uganda has Namuganyi and Susan Musiime Okello, are made possible through a structured development pursuing careers as drilling engineers and are programme for Well Engineers of which they are a currently undergoing extensive technical training. part.” The programme is internationally recognized and As the process to becoming a skilled Drilling rewarding with experience guaranteed across the Engineers takes time and lots of experience, the globe in countries where Tullow Oil Plc operates. learning never ends and Tullow is continuously “So far, the three Ugandan Drilling Engineers coming up with programs to continue the learning have attended a total of 8 training courses in process, Adengo notes. various countries all over the world such as Let’s take a cursory look at the three ladies:

36 The Uganda Chamber of Mines & Petroleum Joan Namukasa Kamya Joan Namukasa Kamya joined Tullow in 2010 as part of the Graduate Drilling Engineering Training Program where Graduate Engineers spend time on Tullow’s various field sites to attain the relevant operational experience. She is in charge of producing daily drilling operations reports in a system dubbed ‘Well View’, following up on the Persons on Board (POB), preparing mud reports and project cost estimates, preparing the 24 hours look ahead and also following up on the service companies.

Her development program requires her to be at the rig site to learn about the drilling operations as per the design, program, and detailed procedure of the well. This is because at the office they do the design, the program and the detailed procedures. While on site they ensure that the programs and procedures are followed to the letter by the service companies and the drilling contractors. “A career in Petroleum Engineering is hugely interesting and I would love to see more women in the profession because it is truly a rewarding experience,” says Namukasa.

Susan Musiime-Okello Also joining Tullow in 2010 as a Graduate Drilling Engineer fresh from university after pursuing a Masters in Petroleum and Environmental Process Engineering with no experience in the Oil and Gas industry was Susan Musiime-Okello. Tullow was keen to develop and enhance her skills through training in various subjects of the oil industry as well as enable her obtain the required hands-on experience required to make namukasa reviews techinical information with her colleagues her a competent Drilling Engineer. In light of this, she spent the most part of the first year and the following years being female has not hindered her in 2011 and has since then developed with Tullow working at the rig sites in learning process at all as she is treated into a Wellsite Drilling Engineer with Uganda (such as Kigogole-6, Nsoga-2, with respect by her male counterparts. immense opportunities at her disposal Ngege-3 and Waraga-1), being part In addition to the valuable learning that in her current role. of, participating and learning from she is receiving, the newlywed mother Since her enrolment in the training the drilling operations as well as the of one has also had the chance to travel program, Susan has worked on land experienced personnel conducting the the world and experience different rigs in Uganda (onshore) and on deep- operations, who are always more than cultures which are invaluable to her as water projects in Ghana (offshore). willing to help. In addition, her role she interacts and works with colleagues Outside the field experience, Tullow involves offering support to the field from all over the world. through the training programme has from the office in Kampala, under the facilitated her in-class training courses supervision of the more senior Drilling Susan Namuganyi with key Petroleum Engineering training Engineers. For Susan Namuganyi, she joined providers to supplement the self-study According to Susan Musiime-Okello, Tullow as a graduate drilling engineer modules and in-house discussions.

The Uganda Chamber of Mines & Petroleum 37 Employment income is collected on a monthly basis through a system called Pay As You Earn at rates prescribed in the law and employers are supposed to with- hold such amounts from employees and submit it to URA by the 15th day of the following month.

How is tax charged on employment income? Whiling reading the National budget on June 14, 2013, Finance Minister, Maria Kiwanuka the monthly threshold (amount below which a resident individual does not pay tax) from 130,000 to 235,000 shil- lings and introduced an additional tax of 10% for those who earn above 10 million shillings a month. So for income exceeding 235,000 shillings but not exceeding 335,000, the rate ap- plied is 10% of the amount by which the employees’ chargeable income exceeds 235,000 shillings. This means that the ura commissioner general allen Kagina and the energy ministry ps maximum amount of tax paid in this Kabagambe Kaliisa bracket is 10,000 shillings a month.

Those earning income above 335,000 shillings but below 410,000 shillings a month, pay 10,000 shillings plus 20% of the amount by which their chargeable income exceeds 335,000. Therefore, the How tax rates maximum amount of PAYE for this bracket is 25,000 shillings.

The last bracket has two categories; those are applied on formal jobs whose income exceeds 410,000 but does not exceed 10 m shillings a month. These pay 25,000 plus pay 30% of the amount After deducting royalties, cost recovery oil and profit oil by which chargeable income exceeds share, the contractor’s profit oil share is subjected to in- 410,000 shillings. come tax in accordance with Uganda’s income tax laws. The second category is for those who earn above 10 million shillings a month. These URA’s Robert Wamala Lumanyika shows how this works: shall have all their chargeable income taxed at rates in the first category of this bracket and thereafter the excess income Except for certain categories of individuals Employment is said to exist where there above 10 million shillings will also be say those serving as policemen, soldiers in is a contractual relationship between the taxed at a rate of 10%. the army; who are exempted by the law, master and a servant for a pay. An em- any one employed formally and earning ployee is an individual engaged in employ- You need to remember that these rates above 235,000 shillings a month, is sub- ment while an employer is a person who apply to resident individuals for the year ject to paying tax on their income. employs or remunerates an employee. of income. Please also note that on the URA website; http://ura.go.ug, is a Pay The Income Tax Law under which Uganda Employment Income includes; wages, As You Earn calculator which if amount Revenue Authority administers tax on salary, leave pay, payment in lieu of leave earned as income is input, will compute income defines Employment Income as - that is to say if you decide to work dur- the would be tax. any income derived by an employee from ing your leave and are paid, overtime pay, any employment, whether past, present fees, commission, gratuity, bonus and Under the Income Tax Act, an employer or in future, including the value of any allowances (entertainment, duty, utility, is obliged to withhold tax, pay it to URA, benefit, advantage or facility granted to welfare, housing or any other allowance). maintain the employees’ records and ac- an employee. count for the tax deducted on a monthly Also included are benefits among which; basis while the employee is obliged to This income also includes an amount or the value of any benefit in kind provided declare total income from all sources benefit provided by a third party under by or on behalf of the employer to the including business income. an arrangement with an employer or an employee, amount of private/personal associate of the employer and it does not expenditure discharged or given back to An employer who fails to withhold and matter whether it is paid to the employee the employer and employment terminal pay the tax as required by the law is or to his/her associates. and retirement benefits. personally liable to pay the tax together with any penal tax and interest there on, Employment on the other hand refers to The benefits in kind among others although he/she may recover it from the a position of an individual in the employ- include; private use of an official motor employee! ment of another person, a directorship of vehicle, provision of domestic servants a company, a position entitling the holder and utilities, meals, refreshments and The writer works with the Public and Cor- to affixed or ascertainable remuneration entertainment and provision of residential porate Affairs Division, Uganda Revenue and or holding or acting in a public office. accommodation. Authority

38 The Uganda Chamber of Mines & Petroleum Our commitment: Making local Content and capacity building a reality By Loïc Laurandel, General Manager, Total E&P Uganda s one of the major oil company, with a longstanding to their compliance to the set standards. However, since presence in Africa of over 60 years, Total has made the upstream sector is nascent in Uganda, some service Athe promotion of local content and the strengthening providers may need some time to adapt their structures in of capacity a strong policy, not only because it’s key in order to comply with the applicable standards which may ensuring the success of our operations but also because include setting up management systems for HSE, quality we are convinced that empowering local businesses and and traceability or meeting our requirements in respect talents is beneficial for the host country as a whole. to the goods and services delivery deadlines. Therefore, Here in Uganda, this policy applies to our scholarship emphasising the added value of training to ensure and programs and our partnerships with education institutions strengthen personnel qualifications is critical. Putting in aimed at strengthening young talented students and place policies to reinforce or acquire the necessary skills professionals who will be the future drillers, engineers, will be of great benefit to the service providers in the managers and administrators (etc…), of the oil and gas short, medium and long run, taking into account the oil potentialities of Uganda and the needs which will gradually industry in Uganda. Oil companies and their contractors will need many of such skilled people in the near future. increase. In this regard, time is of essence and key is ensuring To help in the mapping of the existing services and identify that everything is being done and prepared for when the the gaps to be filled in order to meet the requirement which construction phase and then production start. As a result, will arise in the oil and gas sector, Total E&P Uganda, we continue to encourage students who want to pursue together with CNOOC and Tullow have launched a local their study in oil related fields to venture in this direction industrial base line survey. This survey aims at encouraging and we, at Total E&P Uganda, will continue to grant local service providers to pro-actively and increasingly scholarships and conduct various trainings. be involved in the future opportunities we will offer. For To ensure the smooth success of the construction and more specialized services, Total will promote partnerships production phases, engineering and drilling expertise is between foreign and local companies. We are convinced it is also one of the ways to build and strengthen capacities important, but not enough. It is also important to have . competent local service providers offering the appropriate All parameters towards making the Ugandan oil and gas essential services. As an oil company listed in several stock sector a success story are known. Oil companies and exchanges, Total has to abide not only to local regulations local service providers have to work hand in hand with but as well to the international standards, rules and confidence towards this goal. It is now all about partnering regulations in all countries where the company operates. in the most constructive and conducive manner to transform We therefore pay strong attention to the professional this aspiration into a grand reality for the Ugandan people, know-how of the service providers contracted and as well the Ugandan business community and the investors. www.total.com

The Uganda Chamber of Mines & Petroleum 39 a giraffe near an exploration area in the murchison park NEMA Talks Tough On Environment Black gold underground to respect natural green above ground

A new report that looks activities in the area. had to be in place is because General Manager Eoin Mekie at oil activities in the there is “bound to be a spill” perhaps put it best. environmentally-sensitive A number of oil wells, more at some point. Oil spills lead to areas of western Uganda than 30, are found in the degradation of the vegetation, “The difficulty with this advises some moderation on sensitive areas in western and endanger wild species. development is that it’s the “speed of development Uganda. Wells in national spread over a massive to ensure balanced capacity parks like Murchison have Traffic is expected within the geographical area: the basin building amongst relevant gotten institutions like Uganda parks as the oil companies is 160 kilometres long, it’s institutions, such as NEMA Wildlife Authority (UWA) and either move waste to the a very long way from the (National Environment the NEMA working together to storage sites or during the marketplace, and it’s an Management Authority), to ensure that oil activities do not building of the pipelines. incredibly environmentally and manage the sector.” leave a terrible legacy behind. Already, the oil companies, socio-economically together with UWA, have The report, conducted by a NEMA recently released its oil agreed to maintain a certain sensitive area. So developing Norwegian consultancy firm, contingency plan, which shows speed limit as they move all that, it’s not just developing Eco-Management Support, what it intends to do just in through the parks to avoid any the actual technology for the points out that such a strategy case there is an oil spill. Tom incidents of knocking down wells, it’s getting the stuff would help prepare local Okurut, the Executive Director wild animals. to market that’s the real government institutions, and at NEMA, said the reason as difficulty. the public, to adapt to the oil to why a contingency plan Former Tullow Oil Uganda

40 The Uganda Chamber of Mines & Petroleum Comparing Uganda to reason, that disrupts animals international best practices. Ghana, where Tullow Oil also from mating.” Further focus should be on the operates, Mekie added: “If you waste management. A team Most importantly, the compare this to what we did in The new report from PEPD, from NEMA toured Texas and report recommends deeper Ghana: Ghana was deepwater, titled Strategic Environment Louisiana in the United States collaboration between the single platform, pretty much Assessment of Oil and Gas in late 2010 to learn about different institutions around off-the-shelf technology from Activities in the Albertine waste management system. the oil industry, and applauds the Gulf of Mexico – a floating Graben, Uganda, notes that Government officials have also the discussions government storage buoy, tanker comes ‘The activities should also held discussions with other has held with the Democratic alongside to take it away to ensure maintenance of the African states on how to man- Republic of Congo thus far. market. High capital costs, but status quo of the ecosystem age waste. technically relatively easy. This and the biodiversity or even “The government has taken a is completely different.” improving it.” The report points out that proactive role in communica- “Waste management has tion with neighboring states Optimism is high though The report recognizes the already received increasing regarding trans-boundary is- since the global oil giant Total significance of the oil industry attention. Waste management sues such as sharing of petro- operates in EA 1, which has oil to Uganda, but calls for strategies and facilities cover- leum reserves across borders wells in sensitive areas. Total caution with regard to the ing the existing legacy waste with Democratic Republic of has a solid record in working environment. as well as future waste have to Congo. Further efforts should in such areas, one of the most be developed in the very near be made regarding shared prominent being in Gabon. “The emerging petroleum future in line with interna- oil spill contingency for Lake sector has a high potential tional best practice.” Albert and the Nile, fisheries Tullow Oil, which operates to contribute significantly management, security of oil in EA 2, has also put in place to Uganda’s economy, Government intends to hire and gas installations, as well environmental guidelines, industrialization and poverty a company to manage the as border security,” the report which it adheres to. alleviation plans. However, as waste. There are a number notes. the petroleum resources are of companies that have been Nevertheless, that has not located both within and in the licensed, which are awaiting Collaboration appears to be stopped NEMA from putting vicinity of environmentally government advertisement for the best way that the black a few ground rules. Okurut sensitive and protected a waste management firm. gold underground does not said that they had advised the areas, this poses a particular destroy the natural green oil companies, among others, challenge to the government, The report calls for the above the surface. So far, all against driving white cars or the petroleum industry adherence of the Environment parties agree that this is how it wearing white shirts while in and the society at large in Impact Assessment reports, is supposed to be. the parks because “for some Uganda,” it states. with work carried out to meet

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The Uganda Chamber of Mines & Petroleum 41 A Ugandan scholar - part of the Tullow Group Scholarship Scheme - being congratulated by British Council’s Hugh Hoffatt, Minister Irene Muloni and Eoin Mekie, the former General Manager, Tullow Uganda. Uganda seeks to train more of the same under the ‘Skilling Uganda’ project Skilling Uganda… How Ugandans will achieve their national content aspirations….. That the skills of Uganda’s human In Uganda, an aligned effort is required across resource can be improved is not the oil & gas industry and government to ensure debatable. This detail is especially the industry can provide substantial employment glaring in certain industrial segments. for its citizens. As the oil & gas industry requires For emerging sectors like oil & gas, such a high level of technical expertise, the the situation is more challenging; yet time is now to address the issues and reform having citizens managing their own the education system where necessary. This natural resources can only be the right will be a long and challenging journey but one thing. When we look at the evolution which will be necessary and beneficial to all of national content in other countries it stakeholders. can be seen that only with the aligned efforts of industry stakeholders and As such, ‘Skilling Uganda’, a 10 year development political will can the correct policies to plan, is specifically meant to address this skilled improve skilling levels be realised. workforce shortage. Not only will it be looking at addressing traditional sectors like agriculture, For example, in the early days of the but the nascent ones like oil & gas and mining oil & gas industry in the UK there were will be at the forefront when designing the many non-British workers recruited. relevant institutional bodies. Being a key player They brought their expertise to the in the oil and gas sector, the Uganda Chamber workplace and passed on knowledge to of Mines and Petroleum (UCMP), has pledged dr. charles ingole okou, the domestic workforce. The transition to partner with Skilling Uganda to help equip The scheme’s Executive Secretary to adopting the new technical skills was the local populace with the precise proficiency reasonably straightforward for the UK needed to undertake the lucrative but greatly as a solid educational infrastructure specialised tasks in the sector. To illustrate was in place and a long history of how wide-reaching Skilling Uganda is intended engineering, shipbuilding, mining etc. to be is Dr. Charles Ingole Okou, the scheme’s had been established over generations. Executive Secretary:

42 The Uganda Chamber of Mines & Petroleum builds on considerable progress in the reform of the BTVET system achieved during the last decade, which included the adoption of the BTVET Act in 2008, which established Uganda Vocational Qualifications Framework (UVQF).

Technical-vocational training is vitally important for the production of critical skills in Uganda. Technical-vocational training is a sound investment for the individual, the employer, and the economy. For the individual, the economic returns on this investment accrue in the form of increased earnings. For employers, the economic returns are realised through gains in productivity and profits. For an economy, the returns are found in the expanded output of goods and services and economic growth. Skills development for participants in the Figure 1: major areas of reform to be addressed by skilling uganda labour force is important in Uganda for several reasons. Technological change, ‘Skilling Uganda’ is the term used for by an Executive Secretary. Kevin Hugh- higher value added and the increased the 10 year ‘Business, Technical & es of Petroleum Skills Uganda is the competition flowing from trade Vocational Education Training (BTVET) RTF member representing the Uganda liberalisation accelerate the demand Strategic Plan 2012/3-2021/2’ for Chamber of Mines and Petroleum. for higher skills and productivity among skills development in Uganda. With workers. Skilled workers are more this programme operationalized, the Skilling Uganda incorporates BTVET ac- readily able to adapt to new processes. BTVET system of Uganda will undergo tivities of existing actors, specifically the Growing, competitive economies benefit a paradigm shift (see Figure 1) by BTVET Department and the Directorate from their presence and their movement transforming from an educational sub- of Industrial Training (DIT) under the to employment that is more productive. sector into a comprehensive system of Minister of Education and Sports (MoES). skills development for employment, It will model its activities around creat- It is equally important to invest in productivity and growth. ing employable skills and competencies the skills of economically vulnerable relevant in the labour market instead of people. Instead of educational certificates, the educational certificates, a move meant Skills development is essential for main purpose will be to create employable to reduce unemployment and increase individual prosperity. skills and competencies relevant in the entrepreneurship in the country. It is Skills enable the individual to increase labour market. Training contents will also expected to bridge the gap of youth productivity and incomes. This is be aligned with skills requirements in unemployment and will embrace all especially important for the people who the labour market. Skilling Uganda will Ugandans in need of skills. must eke out a living in the informal embrace all Ugandans in need of skills, sector of the economy. not only school leavers. There will be short courses, individualised, practical and flexible It is doubtful if Uganda will be able to This reform requires new thinking and leading to the awarding of qualifications generate enough wage jobs for those new concepts for the way BTVET is that will be equated to those in formal entering the labour market. The vast planned, organized and implemented. systems of education. majority of new entrants to the labour It calls for a broader scope of BTVET in market will have no alternative but to (i) stakeholder participation, particularly Why go the ‘Skilling Uganda’ Way? work in the informal sector. Knowledge employers, (ii) target groups, including Employers in Uganda often complain and technical skills are essential for adults, disabled and out-of-school about the shortage of appropriately workers in the informal sector to increase youth), (iii) occupations, and (iv) public skilled and qualified workers. Skills gaps their productivity and incomes and raise departments, including agriculture and in some sectors, such as construction, them out of poverty. industry. actually constrain enterprise production and expansion. AIDS has sometimes Critical intervention areas include the Processes depleted scarce human capital and development of comprehensive public- Skilling Uganda is Private Sector led magnified the need to replace skills across private partnership in BTVET, building and is being implemented in 2 phases. a wide range of occupations. The direct a unified body for managing skills The first phase is expected to achieved impact in companies is manifest, inter development in Uganda, expanding the in 2016 and the second by 2022. This alia, in staff turnover, skills shortfalls and scope of the UVQF and reforming the first phase of implementation will lead high retraining costs. Large segments of system of BTVET funding, including the to the creation of a Skills Development the population, including those in the introduction of a BTVET levy. Authority and will be managed by the informal sector of the economy, youth Reform Task Force (RTF). and women, lack access to the skills Priority investment programmes include they need for productivity and incomes. institution-building, expanding BTVET The RTF is a 26 member team appointed The Ugandan system of skills provision in the National Development Plan by the Minister of Education and Sports. also faces major challenges in improving (NDP) priority sectors, expansion and It is headed by Mr. David Lukwago, a linkages with the world of work, raising improvement of agriculture training, representative and employee of Federa- standards and expanding coverage. improving skills for productivity in tion of Uganda Employers. More than This ten-year plan sets out the main the informal sector; strengthening of 50% of RTF are from Private Sector. The reforms needed to upgrade the skills of existing BTVET institutions and BTVET RTF is assisted by a Secretariat headed the Ugandan labour force. The strategy instructors’ training.

The Uganda Chamber of Mines & Petroleum 43 The tough road ahead of building local content

The presidential assent to the Petroleum (Exploration, Production and Develop- ment) Act, 2013, is opening up the country’s petroleum industry to a new level. The Act was passed by parlia- ment in 2012 and received a presiden- tial assent in March this year.

It became effective on April 5, 2013 setting another stage of petroleum activities in the country.

For starters, the Act lifts the moratorium on acquisition of exploration acreage that has been in force since 2007, thus opening the door for the first time for competitive bidding of exploration licenses.

A new round of licensing is expected to attract new players in Uganda’s petro- leum industry. This will definitely foster competition and offer Ugandans an op- portunity to participate in the industry through employment and provision of goods and services.

The Act also establishes new institu- tions — the Directorate of Petroleum, the Petroleum Authority, and the Na- tional Oil Company.

Fred Kabanda, a principal geologist in the Petroleum Exploration and Produc- tion Department (PEPD), notes that the establishment of these institutions, coupled with other production and ex- ploration activities, creates an excellent opportunity for Ugandans to participate in the sector.

“All these institutions will need quali- fied staff. Oil companies that will be licensed will also need staff. So, this is an opportunity. Ugandans need to prepare themselves to tap into these opportunities,” Kabanda said.

According to PEPD, 10,000-20,000 people will be directly employed in the production phase alone, while others will be employed by oil exploration

44 The Uganda Chamber of Mines & Petroleum firms and others to Ugandan companies representing 84% of the total work- procedure, but we are going to launch providing goods and services to the force. She said wherever the company our scholarships at Master’s level be- sector. can, they source for local services. fore the end of the year. Skills transfer is part of our objectives as a company,” However, these opportunities could For instance, all oil companies ad- Lubega said be missed if Ugandans don’t train and vertise existing vacancies as well as prepare themselves to take up the jobs, tenders in Ugandan media, which of- Challenges ahead and also if they don’t improve the qual- fers Ugandans an opportunity to apply. However, Matovu said that getting ity of their services. Tullow Oil and Total have also been qualified and experienced Ugandans instrumental in giving Ugandans schol- in highly technical areas in the industry According to the Act, oil companies arships for further studies, especially is still a challenge. “When it comes will have to employ Ugandans as long at master’s level and supporting the to high technical areas like operating as they are qualified. For instance, Uganda Petroleum Institute Kigumba and engineering of rigs, we don’t have section 126 of the Act makes it manda- (UPIK). Ugandans there,” Matovu said. This, tory for oil companies to have plans of he acknowledges, is likely to remain a technology and skills transfer. The scholarships are meant to ensure challenge for some time because nei- that Ugandans are skilled enough to ther the oil companies nor the govern- “The licensee shall within 12 months, take up even expatriates’ jobs. ment of Uganda own an oil rig. after the grant of the licence, submit to the Petroleum Authority for approval Zakalia Lubega, the Corporate Social “The rig is hired together with its a detailed programme for recruitment Responsibility Manager at CNOOC, manpower. This has denied Ugandans and training of Ugandans in all phases reveals that like its partners, Total and an opportunity to get skills in operating of petroleum activities and shall take Tullow, CNOOC will soon launch a and engineering a rig,” Matovu said. into account gender, persons with dis- scholarship. abilities and the host communities,” the Another challenge is that the country Act reads. “You know CNOOC is a late entrant. is likely to have a mismatch in terms We are still establishing structures and of training and skills and the available The licensee shall also be required to submit a report to the Petroleum Authority showing achievements of trainings and recruiting Ugandans. Part “…expatriates will be given three years of the training, the act emphasizes, in- cludes offering Ugandans scholarships within which to train Ugandan replacements. and financial support towards their education. After that, the three-year permit of the

“Since local content is already provided expatriate will not be renewed; it will be the for in the Act, the new regulations are going to ensure Ugandans partici- Ugandan to take over…” pate in the sector,” Bukenya Matovu, the spokesperson for the Ministry of Energy, said, “The principle will be that jobs. The majority of students, accord- ence to goods, which are produced for every expatriate staffer, there is a ing to Matovu, are rushing for degrees or available in Uganda and services, Ugandan counterpart being trained to and masters, and ignoring middle-level- which are rendered by Ugandan citi- take over.” hands-on skills like welding, where the zens and companies. bulk of workforce will be employed According to Matovu, expatriates will especially during production. Where such goods or services are not be given three years within which to available in Uganda, they (compa- train Ugandan replacements. After that, “Some production stages will be nies) shall be provided by a company the three-year permit of the expatri- automated. For instance, we shall not which has entered into a joint venture ate will not be renewed. It will be the need more than three people at produc- with a Ugandan company, provided Ugandan to take over. tion,” Matovu said. He added: “During that a Ugandan company has a share production, the industry will need few capital of not less than 48% of the joint Fred Kabanda says so far oil companies people with Masters Degrees,” stress- venture. have been compliment to local content ing the need for more engineers than in terms of employing Ugandans and petroleum geo scientists. The licensee shall within 60 days after offering scholarships for further training the end of each calendar year, pro- and skills development. “Over 80% of Tenders vide the authority with a report of its Tullow staff are Ugandans, while Total An important aspect of local content is achievements and its contractors and is 70% and CNOOC 60%,” Kabanda buying local products like food, con- sub contractors’ achievements in utiliz- explained. struction materials, whenever they are ing Ugandan good and services. available as opposed to importation. Cathy Adengo, the Corporate Com- For instance, section 125 of the Act, These provisions, Matovu said, are munications Manager, Tullow Oil, says provides that a licensee, its contractors meant to ensure that Ugandans get the company employs 167 Ugandans, and sub contractors shall give prefer- maximum benefits from the industry. Tullow reaffirms commitment to Uganda Jimmy mugerwa, Tullow Uganda, General Manager

ullow Oil is committed to noting that Tullow continues to have Of the four, Total operates EA 1A operating in Uganda and seeing a good working relationship with the and EA that has the Jobi-Rii well and the country join the exclusive Government of Uganda. CNOOC, 3A where the Kingfisher well club of oil producers contrary is. Tullow Oil, an operator of EA2 that Tto claims that the company was scaling “The Uganda project is of great has Mputa, Waraga Kasamene wells, down on its operations in the country. significance to Tullow and we retains a 33 percent stake in all the committed to being in Uganda for the interests. Citing disagreements over investment long term,” Adengo said, “Uganda’s decisions that were holding the Oil and Gas sector has a bright future company’s resources and frustrating ahead of it and we are proud together Adengo noted that the oil company its bosses, a streak of speculation with our partners to be a part of this was not scaling back on its footprint dominated media that Tullow was journey as the project moves forward in Uganda. She said that the Irish contemplating quitting Uganda. into development and production for company has exploration activities the success and growth of Uganda’s in Kenya just like it has activities in The heat from the corruption economy and the country as a whole.” Uganda, which is moving on from allegations made in a London court exploration to development phase, in March this year, reports indicated Tullow’s partners are France’s Total a critical stage that will lead to worsened an already brittle relationship E&P and Chinese Offshore Oil production and see Uganda join the between the company and the Company (CNOOC), which each league of oil producing countries. Ugandan government. own a 33.3 percent stake in each of its four licence interests in Uganda “These are key projects for Tullow in However, Cathy Adengo, the – Exploration Area (EA) 1A, EA1, E A 2 the East African region in addition to company’s Corporate Communications and EA 3A. our exploration activities also taking Manager, dismissed these claims place in Ethiopia,” Adengo added.

46 The Uganda Chamber of Mines & Petroleum The Uganda Chamber of Mines & Petroleum 47 cathy adengo, tullow spokesperson

Reports had indicated that recently, stated repeatedly that it is committed stalling negotiations, the government Tullow missed several meetings held to Uganda for the long-term,” George and the oil companies finally reached between the oil companies and the Cazenove, the Head of Media Relations a compromise. The government agreed President to discuss development plans. at Tullow Oil Plc was quoted in the to 30,000 bpd refinery that will be media last year. improved to 60,000 bpd and gradually President Museveni’s meeting with a to 120,000 bpd. The government top official from Total, Jacques Marraud procured US based energy investment The issue then, was a gridlock over des Grottes, the Africa Vice President advisory, Taylor-DeJongh to among reaching a commercially viable of Exploration and Production for Total others recommend the appropriate investment decision. Tullow and its at his country home in Kisozi, Gomba ownership for the refinery among other partners wanted a small capacity district also further fuelled speculation. things. As part of the agreement, there refinery of 20- 30,000 barrels and a will also be an optimum pipeline. pipeline to ship out most of the crude. Museveni and Marraud des Grottes But the government had insisted on a discussed the oil refinery among other Apart from the investment decision, much bigger refinery of 120,000 barrels things. This would appear like Tullow, Tullow’s relations with Uganda were per day of oil. a pioneer company in the country’s oil distorted by the allegations made by industry was being sidelined. Khawar Qureshi, a Heritage Oil lawyer The government’s argument is that the that Tullow had toed with the idea of demand for oil products in Uganda is But Adengo told the UCMP bribing Ugandan authorities. 30,000 bbl/day, the region, 200,000 Magazine that Tullow, Total E&P and bbl/day and growing at 7 percent. CNOOC together have undertaken Tullow, through a March 21, 2013 all engagements regarding the This disagreement fuelled allegations statement from Jimmy Mugerwa, the development as a Joint Venture that Tullow was planning to quit the company’s General Manager, apologized Partnership. Ugandan industry since it could not and said it regretted the embarrassment hold out for a long time for financial caused to the President and the people Adengo is not the first to affirm Tullow’s reasons. of Uganda by the allegations, commitment to Uganda. “Tullow is not planning to exit Uganda and has However, recently, after months of Aidan Heavey, the CEO and founder of

48 The Uganda Chamber of Mines & Petroleum CitiBank Cocktail

Tullow Oil, had also written to President Museveni noting that, Tullow will take all necessary action to clarify the facts to the public.

“I have been Chief Executive Officer of Tullow Oil for 27 years and from humble origins have built Africa’s largest independent Exploration and Production company with an enviable reputation for successful …” Heavey’s letter read, “At no point in those 27 years has any allegation of corruption been substantiated in respect of Tullow’s management.”

In his closing statement to the Judge, Tullow’s barrister, David Wolfson QC, said that Tullow regretted that Uganda, its public servants and political leaders, including the President, were, solely as a result of Heritage’s strategy, caught up in the dispute, and that Heritage used the cover of Court proceedings to make statements and/or insinuations which were false and entirely baseless.

He added that Tullow’s behaviour was entirely proper throughout and Tullow never engaged in any illegal, immoral or corrupt behavior and threatened that if Heritage repeated the allegations out of court Tullow would take action.

The dispute started when Heritage Oil, from which Tullow had acquired part of this stake in a $1.45 billion transaction, left town without paying the $434 million Capital Gains Tax (CGT) that the government had levied on the transaction. To clear its farm-dowm, Tullow paid Heritage only $1.045 billion. $ 121.5 million or 30 percent of the levied tax went into an escrow account as is required in a situation of a dispute and Tullow paid $313 million to the Uganda Revenue Authority (URA).

Tullow would battle Heritage in court to get back its money. Uganda was also in another court with Heritage over the tax — a case Ugandan officials said the country had since won after Heritage lost its three arguments against the CGT levied on its transaction.

All this was intended to clear a way for production. With the storm about chinedu ikwudinma, md citibank uganda, poses with guests. dr. roberto the allegations having calmed down, Ridolfi (C) the head of the European Union delegation here said Uganda Tullow and its partners say that their needed to invest in infrastructure immediately over the petrodollars come focus is now on production. in to help the private sector prosper.

The Uganda Chamber of Mines & Petroleum 49 COMESA Oil, Gas & Mining Summit

50 The Uganda Chamber of Mines & Petroleum COMESA Oil, Gas & Mining Summit

The Uganda Chamber of Mines & Petroleum 51 Potentially More Valuable Than Oil? In-ground value of the clays is at least US$500 billion

activities in areas of Bugiri, Iganga and the Aluminous Clays of Makuutu have Mayuge District, it is indeed true that far much higher basket prices than all Uganda is gifted by nature; and maybe as the clays and sediments in the world; President Museveni has taken to saying including the Chinese Ion-Adsorption of late “Gifted by God and Nature”. Clays which do not have Scandium and Gallium. They also have the highest At the recently concluded COMESA Oil, ‘ore-value’ of all the clays and sediments Gas &Mining Summit in Munyonyo, worldwide to date. Kampala, David Kyagulanyi of Kweri Ltd made the first public presentation “The Aluminous Clays of Makuutu of analysis Kweri’s recently received and those of Grande Vallee Deposit in geochemical results of exploration Quebec, Canada, seem to be forming a pitting work in Bugiri, Iganga and new outside-the-box distinct category Mayuge District. of economic mineralisation – especially thanks to Orbite Aluminae’s new game In Kweri’s presentation, which was changing technology. The rare earth very well received and given a thumbs- and rare metal Aluminous Clays of up, by the experienced geologists from Makuutu and Grande Vallee, have Zambia and Malawi as well as Uganda’s far much higher basket prices than all most well trained geologists, Kyagulanyi REE deposits worldwide, inclusive of mentioned that Uganda hosts a potentially hard rock deposits, because of their very large tonnage of Aluminous Clays enrichment in Scandium and Gallium. david Kyagulanyi makes his pres- highly enriched in rare earths, yttrium Only Russia’s Tom Mot Deposit may and the rare metals scandium and have a higher basket price,” noted entation at the COMESA summit gallium. Of the clays and sediments Kyagulanyi, Consultant and Director of outside of China, these Aluminous Kweri Ltd., who also made this rather In the end Churchill may be proved right, Clays of Makuutu have comparably very rare discovery. decades after he said that Uganda is the good TREOs and Metrics in comparison Pearl of Africa; because it appears that to other geologically similar deposits Kweri believes that using Orbite Uganda hosts another mineral resource under development in other parts of the Aluminae’s technology, from the which not only could very easily surpass world. Makuutu Clays can be extracted: Oil in in-ground value, but could last for Alumina, Haematite/ Iron ore, High a much longer period than our oil. In addition, when considering only rare Purity Silica, Titania, Magnesia, Oxides earths, these clays of Eastern Uganda of Rare Earth Metals as well as Oxides of According to Kweri Ltd., a local have good basket prices and the the Rare Metals -Scandium and Gallium. Ugandan Company which has doggedly highest ‘ore-values’ for clays outside of Kyagulanyi says that given the large area been carrying out mineral exploration China. With Gallium and Scandium, which has been sampled and proved to

52 The Uganda Chamber of Mines & Petroleum be having aluminous clays below the murram; complimented by some work that was carried out a few years ago that showed that the sedimentary basin could go to 500m depth in places, there is easily a potential in ground / tonnage of 3 billion tonnes of clays whose raw, in ground value is at least US$500 billion (UShs1,250 trillion).

“One standard Orbite Technology plant may need at most 110 million tonnes of clays to operate for 30 years. Given the large area available, the open mining pits need not be deeper than 11m for the first plant, except if the economics of the minerals to be extracted demand so. For a second plant, the depths need not be more than 17m. Given the world- class mineral endowment levels of the Makuutu clays, first year sales revenue could be enough to cover more than 80% of the Capex and Opex of an Orbite Technology SGA plant. Even the laterite, which is the overburden, is an economic resource in itself. This is clays from neitandhu Village, makuutu subcounty, iganga district astounding economics, to say the least,” resource has the potential to change Buwaaya basin, is a significantly Kyagulanyi explains. many industrialisation aspects of the substantial (>500,000,000 tonnes), East African and COMESA Regions, world-class tonnage, of potentially, the In Kweri’s presentation, it was shown when you look at the mineral products most valuable, economically endowed that the area infrastructure could not have been better; being less than 20kms away from an international railway line the Aluminous Clays of Makuutu have far much and international highway, in addition to having a High Power Voltage line, higher basket prices than all the clays and carrying electricity to Kenya, going through the area of Kweris exploration sediments in the world; including the Chinese Ion- license. Kweri also showed why they believe this may be a truly unique Adsorption Clays which do not have Scandium resource; a very difficult type of Aluminous clays to locate elsewhere and Gallium worldwide.

“It is not yet celebration time and there that Orbite Technology unleashes out and economically attractive Rare Earths is still a 4 to 5 year-long road ahead, of these clays. I do believe that hosted and Rare Metals Aluminous Clays in the of focussed work. This geological within the entirety of the Makuutu- World.” humbly adds Kyagulanyi.

location of sample pits and areas of high rare earths and rare metals in aluminous clays in parts of makuutu, Buwaaya and Buwunga subcounties of iganga, mayuge and Bugiri districts

The Uganda Chamber of Mines & Petroleum 53 Companies, Gov’t agree on refinery, pipeline Refinery Development Schedule

Government’s roles

‡ Environmental Feasibility Identify ‡ Land acquisition baseline survey FID study developer ‡ Project promotion ‡ Logistics study

2010/2011 2012/2013 2012/2013 2013 2013/2014

Investor’s roles

‡EIA Engineering Commission Expansion 1 Expansion 2 Expansion 3 ‡FEED Procurement First train – 60,000 bbl/d 120,000 bbl/d 180,000 bbl/d Construction 30,000 bbl/d 2014 2014/2015 2016 2018 2022 >2022

he agreement between oil pump oil in three to five years. companies and the government to start refining 30,000 barrels of oil The refinery, the Permanent Secretary T in the Ministry of Energy, Kabagambe- per day in 2016 might be the greatest piece of news in Uganda’s oil industry Kallisa said would have a full capacity so far. An export pipeline has also been of 60,000 barrels per day but would agreed to. start pumping the said barrels in 2018.

It put an end to a gridlock that had It will then be expanded to 120,000 blocked further development of the oil barrels per day in 2022 according to industry also unlocking a potential $12 the ministry’s refinery development billion in investments into the sector. schedule. Excess oil will then be Hopes are now renewed Uganda will pumped in crude form through a

54 The Uganda Chamber of Mines & Petroleum pipeline to a seaport on the Indian in petroleum processing, transportation reached …” Tullow Oil wrote in a Ocean in neighbouring Kenya. and storage facilities. May, 8 Interim Management Statement, “Critically, agreement has been reached The refinery had remained a sticking The refinery area that will include on a basin commercialisation plan point in the development of Uganda’s an aerodrome, waste management which will include an export pipeline oil resources for almost a year after facilities, future associated industries and a refinery sized to meet the local Tullow farmed-down 66 percent of such as petrochemical industries and market demand.” its assets to France’s Total E&P and staff quarters is a 29 sq.km stretch in in the Chinese National Offshore Oil Kabaale parish, in Hoima district. The government and the oil companies Company. are now waiting to seal the deal in a Government has already earmarked Memorandum of Understanding being The government with an army of over Shs70 billion ($27m) for their prepared that will form the basis of statistics had said d a bigger refinery compensation and relocation of those the integrated development work plan was more economically viable for that demanded that during the surveys for the basin that will also include a Uganda, though the IOCs had preferred that the government carried out. number of Field Development Plans a smaller one (about 20,000bpd). and Production Licence Applications The government also hired US based that will be submitted during the course Uganda alone, government officials firm Taylor-DeJongh to offer transaction of the year, Tullow Oil noted. say, was consuming about 30,000 advisory services about the appropriate barrels of petroleum products per day ownership and financing options for the “The MOU is probably the most critical and the region was at 200,000bpd refinery. Together with the government, thing and the hardest thing to get done. growing at 7 per cent per annum, the company will also source for the Once that’s done then the rest is just a hence the stance on that refining lead investor and financing for the process,” Aidan Heavey, the Tullow Oil capacity. refinery. Plc boss said.

The refinery should relieve Uganda’s At the May meeting with, President Loic Laurandel, the Total E&P, Country expenditure on petroleum imports Museveni and energy officials, the IOCs Manager also told local media that that stands at about $2 billion, hence agreed to the construction of an export 2013 will be an important year for the improving the country’s balance of pipeline, without which, oil giant Total, Ugandan oil sector and the private payment, create jobs and transfer had said that its project in Uganda investors saying that they expected of technology in the refining and would stall. to reach some conclusions very soon associated industries, Irene Batebe, the about the best scheme for Uganda. Petroleum Officer – Refinery said. Like Total, the other two oil companies also wanted to produce and export Following new discoveries the She also noted that the refinery will crude that has ready market, and then country’s reserves had jumped to 3.5 be developed on a Private – Public recover their costs and profit than have billion barrels last year. And with better Partnership (PPP) basis through a joint to go into the lengthy refining and technology, extractable oil is expected venture company with a proposed marketing of finished products from a to jump to 1.7 from the previously 40:60 sharing between public and land locked country. mentioned 1.2 billion barrels. private entities, respectively. Batebe said that a study to evaluate the The current estimates, however, are The higher participation share of pipeline and storage facilities for crude based on only about 40 per cent of the 60 percent is intended to provide oil and gas by Fitchner MEI Oil awaits Uganda’s oil basin. Of this area, 21 confidence to investors for funding and a cabinet approval on the ownership discoveries have been made, 89 wells also operation of the industry. structure. drilled, with 77 having oil in them representing an 87 per cent success After everything is hammered out, Energy officials said a pipeline of rate. a special purpose vehicle (Refinery 120,000 barrels would make economic Company) will be formed to take sense. The country is expected to Uganda has so far already extracted forward the development and produce up to 200,000 barrels per day 36,000 barrels of oil from 16 wells operation. at peak production for 25 years. and stored under the extended well testing programme. This is to be used Parliament has already passed the “Significant engagement between for power generation. In the Budget Petroleum Bill for Refining, Gas the partners and the Government of Framework 2013/2017, the government Conversion, Transmission and Storage Uganda has taken place recently and a noted it will spend Shs35 billion on that was meant to facilitate investment common understanding has now been refinery funding.

The Uganda Chamber of Mines & Petroleum 55 total’s loic laurandel: Students need further training Kigumba graduates’ unfulfilled dreams

Following oil discovery in the Albertine “Everyone was talking about oil and among others. graben, many Ugandans have been gas and the potential of getting well- trying to position themselves on how to paying jobs,” he explains. While at Unmet expectations tap into the benefits from the petroleum UPIK, Onegi was a student leader and industry. Many have refocused their says the pioneer class often considered “I thought I would get a job businesses to suit the sector while themselves lucky. “We knew the whole immediately after finishing the course. others have embarked on petroleum country was behind us, and we would I’m still looking for a job,” Onegi related training with a hope of scoping immediately get jobs,” he said. Things reveals. “I am now well-qualified but ‘juicy oil jobs.’ would later turn out differently. can’t find a job,” he complains bitterly.

Moses Onegi is one of the many UPIK was established in 2010 as part Moses Arupei, Onegi’s course- Ugandans who went back to school. of a strategy to enhance local content mate, also abandoned his career in When Onegi joined the Uganda in the nascent petroleum industry. The information technology to chase his Petroleum Institute Kigumba in 2010, institute offers a diploma in technical his ambition was to work in one of the international oil companies, or the energy ministry. Born in Nebbi district, West Nile, an area thought to hold “…All the students are competent enough but vast amounts of oil deposits, Onegi is among the 28 pioneer students of UPIK. there is need to reconcile the academics on one hand and the practice on the other. Kigumba By the time he joined UPIK, Onegi was already a graduate of engineering students need a lot of attention…” and a tutor of civil engineering at Pakwach Polytechnic. He abandoned his teaching career to join the bandwagon of Ugandans studying oil- related courses following the country’s skills related to oil and gas, followed UPIK are designed to impart high-level discovery of the black gold. by an additional six-months training in practical skills in areas such as drilling, Trinidad and Tobago. The courses at pipe-fitting and health and safety,

56 The Uganda Chamber of Mines & Petroleum oil and gas dream. By the time he government take long to agree on issues PEPD estimates that between 10,000- joined UPIK, Arupei was a graduate such as field development and taxes. 20,000 jobs will be directly created of Computer Science from Makerere within the industry in Uganda, although University. Bandwagon more widespread opportunities are to be found in auxiliary industries such “I had a job. But I had an interest in Many universities now offer oil-related as construction, services and even serving Uganda as an informed person courses. Makerere University has an agriculture. in oil and gas. It was a virgin area,” he undergraduate as well as a master’s says. At UPIK, Arupei says, government programme; Nkumba University last “Some production stages will be paid for everything. “All of us were year introduced a Bachelor of Science automated. For instance, we shall government-sponsored students,” he in Petroleum and Mineral Management not need more than three people at a says with a sense of pride. and Technology; Mbarara University of production site,” Matovu explained. Science and Technology is building a This means that the majority of Like Onegi, Arupei hoped to get a job new faculty on petroleum studies while Ugandans need to acquire skills and even before he could graduate. Today, Uganda Christian University also plans specialise in areas such as pipe-fitting, both are still on the street looking for to introduce oil-related courses. welding and metal fabrication, among that elusive job. “Theoretically, I can others, where the bulk of the jobs will drill,” Arupei says, adding, “That is Yusuf Bukenya-Matovu, the Energy be. why I need a job to put my skills into Ministry spokesperson, says it is practice. I have put in three years to important for Ugandans to be strategic Arupei though believes his fellow study this prestigious course, but what while choosing courses. The petroleum countrymen need to quickly understand hurts me is I have no job.” industry in general and the upstream that oil and gas is not the only option sector in particular, he explains, is more because short of that, they will continue Out of the 28 pioneer students, only capital intensive than labour-intensive. to suffer great disappointment. two students have found jobs, Arupei reveals. One of the lucky two, Simon Katugume, works with Tran Track, a service company in the oil sector. He works as a health and environment safety officer.

“If the petroleum sector has failed to take on board only 28 people, I’m worried when we become thousands,” Arupei says.

On their part, the oil companies feel the students need further training. Loic Laurandel, the General Manager of Total E&P Uganda, says UPIK is doing well and just needs more support to enhance its training. He said Total had partnered with UPIK in that respect.

“Some of these students should apply for scholarships for masters to go for further studies and specialize,” he said. “All the students are competent enough but there is need to reconcile the academics on one hand and the practice on the other,” Laurandel explained, “Kigumba students need a lot of attention.”

Irene Batebe, a petroleum officer in charge of refining at the Petroleum Exploration and Production Department (PEPD), says UPIK is doing well. “The Ministry of Energy plans to engage UPIK and even other institutions of higher learning to consider even incorporating refinery as a course unit in their curriculum,” she notes.

Prof Charles Kwesiga, who heads UPIK, recently told the website Oil in Uganda that there is need for some patience. “We are doing our best to identify further training for them,” Kwesiga said. He blames the slow progress towards oil production as companies and

The Uganda Chamber of Mines & Petroleum 57 chamber members

Chamber Diamond Members

COMPANY CONTACT PERSON SECTOR Oil and gas exploration and 1. Tullow Oil Ltd Ms. Cathy Adengo production 2. CNOOC Oil and gas exploration & Ms. Chai Wei production 3. Total E&P Oil and gas exploration & Mr. Loic Laurandel production 4. Hima Cement Ltd Mr. David Njoroge Cement manufacturers Oil &gas services 5. Schlumberger Oilfield Mr. Denis Bonifay

6. National insurance Corp Ms. Jocelyn Ucanda Insurance

7. Orient Bank Mr. Ben Lewis Banking

8. East African Gold Hon. Richard Kaijuka Mineral Exploration

9. Bank of Africa Ms. Afsa M. Mukasa Banking

10. Housing Finance Bank Ms. Judith Owembabazi Banking

Chamber Gold Members COMPANY CONTACT PERSON SECTOR Micro-Leasing and Financial 11. Astor Finance Plc Ltd Mr. Gordon Sentib Services 12. Bank of Uganda Mzee Juma Binehe Bank of Uganda Mr. James Mugabi 13. DFCU Bank Banking Mr. Fred Kyakonye 14. Kilembe Mines Copper Mining Oil & Gas Exploration and 15. Neptune Petroleum Ltd Ms. Marilyn Hill Production Mr. Fred Umunna Drilling Tools and Well 16. Orwell International U Ltd Services 17. Stanbic Bank Mr. Nsibambi Daniel K Banking Mr. Mundua Godfrey 18. Standard Chartered Bank Banking

19. Lion Assurance Co. Ltd Mr. Newton Jazire Insurance

20. United Bank for Africa (U) Ltd Mr. Wibrod Owor Banking

58 The Uganda Chamber of Mines & Petroleum chamber members

21. Barclays Bank Mr. Gibson Nangono Banking

22. Roofings Group Mr. Stuart Mwesigwa Steel Manufacturing

23. Centenary Bank Mrs. Beatrice Lugalambi Banking

Chamber Silver Members

COMPANY CONTACT PERSON SECTOR 24. Agility logistics ltd Mr. George Odeke Logistics Insurance & Risk 25. AON Risk Services Ms. Caroline Athiyo Management 26. Askar Security Ms. Kellen Kayonga Security

27. AUC mining Ltd Mr. Moses Masagazi Gold mining Mr. Ben Mugasha 28. Bemuga Forwarders Clearing and Forwarding Ms. Merian Sebunya 29. BTS clearing & forwarding Clearing and Forwarding Mr. Nimit Patel 30. Greenstone Resources Ltd Gold mining Mr. Gary Fitchett 31. Canmin resources Mineral Exploration Mr. Eugene Lazarenco 32. Casco Petroleum Rig Supply

33. AIG Uganda Limited Mr. Edward Hire Insurance Ms. Magdalene Weya 34. Citibank U Ltd Banking Mechanical & Civil 35. Civicon Limited Mr. Jason Horsey Engineering Works 36. Deloitte U Ltd Mr. Tallarovic Matthew Auditors Mr. Eivind Larsen 37. DHL global forwarding Logistics Service Provider Customs Clearance, Heavy 38. Eagle logistics solutions ltd Mr. David Walabyeki Equipment Hire 39. East African Chains U Ltd Mr. David Mayanja Dealers in Mechanical Tools

40. East African Cranes Ms. Colette Gibbons Lifting Services Ms. Hellen Nambi 41. Epsilon U Ltd Waste Management

42. Ernst & Young Mr. Muhammed Ssempija Auditors

The Uganda Chamber of Mines & Petroleum 59 43. Farm Engineering Industries Mr. T. S Padhaal Equipment Supply 44. Flemish inv. Ltd Mr. Bruce Milne Mineral Exploration

45. Freight forwarders( E.A) Ltd Mr. Russell Knight Clearing and Forwarding

46. GCC Services (U) Ltd Mr. Rabih Riad Jaber Catering Services 47. Gold empire ltd Mr. John Muruli Gold Exploration

48. Goodlife (U) Ltd Mr. Shem Nnaggenda Training Solutions

49. Gulf Resources Uganda Mr. Henson Mambo Mining

50. Habib Oil Ltd Mr. Osman Ahmed Noor

51. Halliburton International Inc. Mr. Robert Salmon Oil & Gas Services

52. Inspecta International Mr. William Pike Inspection Services Onshore & Offshore 53. Integrated logistics Mr. Attila Jonathan Logistics Support 54. Kampala Associated Advocates Mr. David Mpanga Law Firm Mineral Exploration and 55. KAMU KAMU drilling experts Mr. Gilbert Mujogya Water Wells Drilling Mineral Exploration/ 56. Krone (U) Ltd Mrs. Rose Rugazora Wolfram 57. Kusaasira & Co. Advocates Mr. Denis Kusaasira Natural Resources Lawyers Inspection, Training and 58. Lloyds British Testing Mr. Stewart Anderson Assessment Insurance & Risk 59. Marsh Uganda Ltd Mr. Paul Mulira Management Mr. Kellen Kayonga Mineral Exploration/ 60. Askar Investments Ltd Tantalite 61. Multilines International U Ltd Mr. Gerald Mukyenga Clearing and Forwarding

62. NFT Consult Ltd Mr. Badru Ntege HR Outsourcing Mineral Consultancy 63. NPK resources ltd Mr. Nathan Wanda Mr. John Muruli 64. Oli gold muruli ltd Gold Exploration Mr. Garvin Conway 65. Oryx minerals ltd Mineral Exploration

66. Petroleum Skills Uganda Mr. Kevin Hughes Skills Training Auditing, Tax and Advisory 67. Pricewaterhouse Coopers Limited Mr. Francis Kamulegeya Services

60 The Uganda Chamber of Mines & Petroleum 68. Richflo Lift services Mr. Richard Magezi Lift Services

69. SAIPEM Mr. Henry Magoba Oil and Gas Services Mr. Sergio Pelosini 70. Salini Costruttori SPA Construction

71. Bollore Africa Logistics Ms. Monica Kisubi Logistics Service Provider

72. Seafast holdings U Ltd Mr. Michael Majeed Logistics Service Provider

73. Semliki Rift trading Co Mr. Patrick Van Pee Lift Services& Ferries

74. Sino Minerals Investments Co. Ltd Ms. Sarah Namara Mineral Exploration

75. Specialized Welding Services Mr. Yvick Robin Welding Services Mr. Dilip Bhandari 76. Spedag Interfreight U Ltd Logistics Service Provider 77. Strategic Logistics Mr. Paul Sherwen Logistics 78. Tamoil East Africa Ltd Mr. Gamal Bouargob Market &Sale of Crude Oil Products Mr. Jeff Baitwa 79. Threeways shipping Logistics Service Provider 80. Toyota U Ltd Mr. Dino Romano Bianchi Car Dealers 81. Transeast (U) Ltd Ms. Sheila H. Graig Transporting

82. Uganda Insurers Association Mr. David Tumuhaise Insurance Mr. Hitesh Shan 83. Union Logistics Clearing and Forwarding

84. Victoria Equipment Ltd Mr. Peter Sekandi General Machinery

85. Victoria Motors Limited Mr. Sam J Kibuuka Car Dealers

86. Woodmore Energy Consultancy Ltd Mr. David Kayemba Oil & Gas Downstream

87. British High Commission Mr. Eric Olanya Diplomatic Mission

88. Mining, Minerals & Metals Ltd Mr. Nari Patel Mining Critical Mission Support & 89. EOD Technology Inc. Mr. Nobert F. Rugunda Site Restoration Services 90. Let’s Go Travel Mrs. Joan Kantu Else Tours & Travel

91. Achelis Uganda Ltd Mr. Michael Nyangabyaki Equipment Sale & Rental

92. Africa Ecoinvest Dr. Abdullahi Hajji Mining & Energy

The Uganda Chamber of Mines & Petroleum 61 93. Pearl Engineering Company Limited Mr. Gumisiriza Birantana Construction

94. Green Albertine Limited Ms. Jennifer Bangirana Waste Management

95. Goldstar Insurance Co. Ltd Mr. Paul Kavuma Insurance

96. UAP Insurance Uganda Ltd Mr. Paul Muhame Insurance

97. Unifreight Cargo Handling Ms. Jennifer Mwijukye Cargo Handling

98. First Mining Company Ltd Mr. Dorde Grujic Mining

99. The Mineral Group Co. Ltd Mr. Barnabas Taremwa B Mining 100. Gras Savoye Uganda Insurance Mr. Johnny Evans Insurance Brokers Ltd Chamber Individual Members Name Specialty

101. Mr. BB Sinha Consultant- Environmental Health

102. Mr. Brian Kaggwa Lawyer

103. Mr. David Kyagulanyi Mineral Consultant

104. Mr. Joshua Tuhumwire Mining

105. Mr. Malkit Singh Saini Construction

106. Mr. Minaz Karmali Businessman

107. Mr. Rajesh Dewani Construction

108. Mr. Sam Thakkar Accounting

109. Ms. Anne Babinaga Business Consultant

110. Ms. Annebritt Aslund Audit/Finance Consultant

111. Mr. Gerard Grant Transportation

112. Ms. Lydia Babinaga Procurement and Consultancy

62 The Uganda Chamber of Mines & Petroleum Chamber Members’ Categories

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