BY PAUL TENTENA
KAMPALA, UGANDA- The biggest ever French business delegation to Uganda, made up of more than 45 executives representing more than thirty French companies active in the oil and gas sector was in the country this week to explore investment opportunities in the oil and gas sector.
Simon D’Ujanga, Minister of State for Energy welcomed the delegation to Uganda while emphasizing that Uganda government’s policy is to encourage private sector investment in the Oil and Gas industry.
He listed various incentives that have been put in place to this effect, including favorable fiscal frameworks, access to existing technical information, improved infrastructures, political and economic stability.
D’Ujanga said Uganda’s intent is to promote valuable utilization of oil and gas resources as evidenced by the ambitious oil refinery and pipeline projects.
“To date, 6.5 billion barrels of oil have been discovered with 1.4 to 1.7 billion barrels recovery rates, a 500 billion cubic feet of non-associated gas and under 200billion feet of associated gas, just from 40% of the exploration areas,” he remarked.
The Minister observed that since the discovery of oil in 2006, significant investments have been made in the sector, adding that in 2011, Uganda attracted the highest FDI in EAC, especially in Oil and gas and mineral sectors, thanks to its conducive investment climate.
D’Ujanga told the French Business Delegation that Uganda’s Oil and Gas sector is at a critical stage as it transitions from exploration to production. He reveled that government has so far issued nine production licences and is evaluating three more ahead of the production phase.
The visit was organised by Business France, the French National Agency responsible for promoting France’s export growth and international investment, Evolen, the association promoting French expertise in the Oil and gas sector, and Total E&P Uganda.
Stephanie Rivoal, Ambassador of France to Uganda, said France is set to become the biggest investor in Uganda thanks to its involvement in the oil projects, adding that the size of this delegation is a clear a sign of the potential France sees in Uganda.
She noted that for Uganda’s oil which is attracting over 10 billion dollars of infrastructure investments is a source of opportunities but it also presents possibly challenges which can be addressed together.
Rivoal said other than oil and gas, France which is known as a technological country, is willing to use its expertise and know-how to enhance Uganda’s tourism, agriculture especially agro-ecology, digital technology, energy and water sectors.
Uganda, she said is in need of industrialization and diversification to avoid the Dutch disease.
“France-Uganda collaboration is not only limited to business but also expands to military and development cooperation. The French Development Agency, AFD, is investing more and more in energy infrastructures, water and sanitation, roads etc,” she remarked.
The French envoy cautioned against challenges French investors may encounter in Uganda, including bureaucracy, cultural differences (sense of time and how responsive Ugandans can be quick to commit but rather slow on delivery).
Dr. Elly Karuhanga, the Chairman Uganda Chamber of Mines and Petroleum (UCMP),described the visit of the French firms as historic, happening at a time when Uganda is at the cast of liberating its people from poverty.
He said that with 20 billion dollars to be spent in three years in an economy whose GDP is $28 billion; Uganda needs the expertise of the French to make such investments.
“We have confidence in Total; one of the top oil companies in the world coming from France which is not an oil producing country. We would like France to help skill our people and help make Uganda’s oil industry a benchmark for the whole of Africa,” he said, adding that French language would be an added opportunity in this endeavor.
Dr. Elly Karuhanga revealed that Uganda registered 87% success rate in oil exploration, the highest in the world. He said that in 2020, the first oil will come out and Uganda will officially become an oil producing country, joining OPEC and other international bodies.
He encouraged the French investors to make Ugandans part and partial of their investments, assuring them of political and economic stability.
“Ugandans are aware that capital is a coward it will run away as fast as possible if threatened by political and economically instability. We will not nationalize your companies”, he reassured.