SMEs and other Participants told of key requirements in the oil and gas sector

Uganda recently held its 3rd Annual National Content Conference under the theme; “the multiplier effect of Uganda’s oil and gas sector” which gave a promising outlook to Ugandans in terms of current and future opportunities.

The National Content future outlook shows that contracts worth US$ 6 bn have been approved. Approximately $1.7Bn is available for Ugandan companies in Tier 1 and 2 and over 11,000 direct employment opportunities are to be created according to the Petroleum Regulatory Authority (PAU).

However to effectively participate in the sector, experts have advised participants that they must be ready to manage change because processes evolve in the sector and new requirements emerge.

For example, Risk is largely placed on contractors. Therefore participants must have risk management systems.

The sector is also hinged on requirements such as participants getting certification with the required standards, establishing effective Management systems to reduce operational costs, continuous capacity building; because the sector realizes that there is a high cost attached to lack of skills, to mention but a few.

Certification is required to bridge systems with international standards.

This by implication means that compliance with applicable government, client and international standards and regulations is an enabling factor to succeed in the sector.

With the construction of the East African Crude Oil Pipeline (EACOP) set to begin soon, a lot more opportunities are expected for the SMES.

EACOP opportunities for SMEs are available in construction such as provision of construction materials like bricks, cement, among others and also in services.

SMEs and other local companies can benefit under the EACOP project in three different stages that is; as community providers, local providers, and as national providers.

Though the opportunities are open to all SMEs and other companies in Uganda, those who meet the prequalification requirements for EACOP tenders will stand the chance.

Drawing lessons from Epsilon’s, experience with National Content under EACOP, each level of the tender process under EACOP has its own requirements.

For example, the tender process for community providers starts with engagement with the local leader, followed by visual inspection of supplies where samples are collected for testing, quality assurance is done and purchase orders are placed upon approval by the consultant.

For Local Providers and National Providers under EACOP, other than compliance with company and tax registration, quality assurance tests and material safety sheets are a requirement before requests for quotations are sent out.

SMEs have been encouraged to take advantage of the existing robust legal framework that promotes national participation like the National Content.

National Content is value added or created in the Ugandan economy through the employment of Ugandan workers and the use of goods produced or available in Uganda and services provided by Ugandan citizens and enterprises.

The Annual National Content conference provides stakeholders with insights into the progress, achievements, and opportunities available for Ugandans and Ugandan companies in the oil and gas sector.

Available Information indicates that as at end of May 2022, 5,070 persons have secured employment in the sector of whom 4,805 (95%) were Ugandans. On the other hand, 389 persons out of the 4,584 contractor and subcontractor employees were from the local

The Petroleum Regulatory Authority indicates that in the last 5 years, approx. 90% of the procurements have gone to Ugandan companies subsequently earning (US$ 1,227,701,788 out of US$1,350,061,360).

Approximately, 73% of the companies involved in supplying the sector have been Ugandan companies, that is, 460 out 624 that have supplied the sector have been Ugandan companies. Additionally, approximately US$ 988,658 has gone to the community economy through provision of goods and services.

In light of this, sector regulators have called on SMEs and other Ugandan companies to put their houses in order by registering on the National Talent Register and on the National Suppliers register and set up systems which will facilitate their entities to meet the requirements of the sector.