Buyuma Weekly Uganda Energy Roundup(Wk #27)

Hello There,

Welcome to this week's?Buyuma Ugandan oil and gas weekly update?covering?the latest energy?news that made waves in Uganda.

As Uganda inches closer to becoming an oil-producing nation, activities related to the oil sector have begun to pick up steam. The taxation of oil and associated goods is one such activity.

According to a recent report by Accountant General Lawrence Semakula, these levies have substantially contributed to the country's overall revenue.

Below are?updates that made the headlines in Uganda's Energy?sector

Uganda Receives First Oil Consignment

Uganda received its first oil consignment imported directly from the refinery by the Uganda National Oil Company Limited (UNOC) on 3rd July?.

“As the sun’s rays started piercing the sky this morning, this vessel carrying 58,000 metric tons of petrol arrived at Mombasa,” UNOC announced.

“It is the maiden vessel as UNOC implements the sole importation of fuel products mandate. The fuel will get into the Kenyan pipeline infrastructure and later to Uganda via trucks,” it added.

This comes less than two years after Uganda and Kenya signed an agreement on the importation and transit of petroleum products between the two countries.

The deal was signed on May 16, 2024, during President Yoweri Museveni’s state visit to Kenya.

The two neighbors agreed on the importation and transit of refined petroleum products through Kenya to Uganda by UNOC, which seeks to facilitate the importation and transit of refined petroleum products through Kenya to Uganda.

The arrangement enables Uganda to import refined petroleum commodities directly from the producer countries.

Uganda Receives 80,000 Metric Tonnes of Diesel from Kuwait

The second fuel-laden vessel arrived on the morning of 4th July?at Mombasa, Kenya, as the Uganda National Oil Company (UNOC) started implementing the sole importation of petroleum (fuel) mandate. ??

Sinbad from Kuwait was carrying 80,000 metric tonnes of ?diesel destined to Uganda.?

Like Martinez, the first one, its cargo will be discharged into the Kenya Pipeline infrastructure ahead of transportation to Uganda.?

The first ship arrived from Jebel-Ali, United Arab Emirates with 58,000 metric tons of petrol on Wednesday. The ?fuel will be discharged into the Kenya Pipeline Company infrastructure, delivering it to Eldoret, Kisumu and Nakuru in Kenya.?

Fuel tankers will thereafter deliver it to Uganda and should be available next week.? The trucks will be hired by Ugandan Oil Marketing Companies (OMCs).?By 01 July 2024, there were 80 OMCs.?

UNOC said it was working with oil marketing companies (OMCs), which will routinely forward their monthly demand by placing orders.?

UNOC also said it was working with the petroleum products supplier, Vitol, to ensure the availability of buffer stocks, which can be called on or made available in case of delays/supply disruptions.?

EACOP project advances with key pump station works

According to Hadi Watfa, the delivery manager of above-ground installations for EACOP, construction began early in 2024 and is progressing well.

There will be two pump stations in Uganda, with the first pump station (PS1) located in Nyamasoga village, Buseruka sub-county, Hoima district.

PS1 will metre crude oil from the Tilenga project in Buliisa district and the Kingfisher oil field in Kikuube district before pushing it to the pipeline.

Construction of the main camp and pipe yard one (MCPY1) in Katikara, Kakumiro district, and CPY 2 in Mubende district is also ongoing.

Clearing of all sites has been completed, and grading of PS1, CPY1, and CPY2 sites will soon be finished.

The project will feature two pump stations and four camp and pipe yards on the Ugandan side.

Watfa noted that China Petroleum Pipeline Engineering Co. Ltd was contracted for construction work, including civil works and construction camps. Several Ugandan companies have been subcontracted for various tasks.

The EACOP project is being implemented by the governments of Uganda and Tanzania, presented by the Uganda National Oil Company (UNOC) and the Tanzania Petroleum Development Corporation (TPDC), respectively, in partnership with Total Energies?and the China National Offshore Oil Corporation (CNOOC).

They operate under a company named EACOP Ltd. Despite the development, the project aims to minimise environmental impact by recycling materials (soils) from the site to avoid disposal, reducing the impact by 80%.

District authorities are engaged in using generated materials, such as soil, for road construction. Topsoil is given to neighbouring residents for farming, and a pond has been constructed to collect runoff water to prevent garden damage. Five water tanks are used to control dust.

However, a challenge has been the lack of a skilled workforce, necessitating investment in worker training.

The company has been sourcing meat and chicken from outside Bunyoro due to local standards, though fruits and other fresh food are procured from the local community.

In an environmental mitigation effort, the EACOP implementers have allocated sh1.2 billion to plant trees in?the 10 districts affected by the project.

John Bosco Habumugisha, deputy managing director of EACOP, mentioned that they are sourcing for an implementing partner to plant the trees, ensuring their growth and accountability.

Opportunities for the Youth in Uganda’s Energy Transition Plan

By Jacob Lwanga

In Uganda, the energy transition plan to shift towards sustainable and renewable energy sources by 2030 presents significant opportunities for the youth to actively participate in shaping the country’s energy future.

As a demographic group that represents a large portion of the population standing at 22.7% as of the 2024 population census and holds immense potential for driving innovation, creativity, and sustainable development, engaging the youth in the energy transition is crucial for achieving long-term success and resilience in the sector.

While Uganda has made strides in expanding energy access and diversifying its energy mix, challenges persist, particularly in rural and underserved communities where a significant portion of the population lacks access to reliable electricity.

The youth, who are often at the forefront of social and technological advancements, can play a pivotal role in addressing these challenges and driving the adoption of clean energy solutions across the country.

One key area where the youth can contribute to the energy transition plan is through innovation and entrepreneurship.

With their fresh perspectives, digital skills, and entrepreneurial spirit, young people in Uganda have the potential to develop innovative solutions for energy generation, distribution, and consumption.

Start-ups and tech companies led by young entrepreneurs are already emerging in the renewable energy sector, offering solar-powered solutions, energy-efficient appliances, and smart grid technologies that cater to the needs of local communities.

Moreover, engaging the youth in capacity-building programs, training initiatives, and educational opportunities related to renewable energy can help build a skilled workforce equipped to drive the transition towards a more sustainable energy future.

By investing in youth education and skills development in areas such as engineering, renewable energy technologies, and energy management, Uganda can nurture a new generation of professionals who are well-equipped to lead the country’s energy sector towards greater efficiency and environmental sustainability.

Additionally, involving youth voices in policy-making processes, decision-making bodies, and community energy projects can ensure that their perspectives, experiences, and aspirations are taken into account in shaping the energy transition plan.

Empowering youth advocates and activists to raise awareness about the benefits of renewable energy, advocate for clean energy policies, and mobilize support for sustainable energy initiatives can help build a more inclusive and participatory energy transition process.

In conclusion, the ETP for Uganda presents a unique opportunity to engage and empower the youth in driving sustainable development, economic growth, and environmental conservation.

By harnessing the energy, creativity, and enthusiasm of young people, Uganda can accelerate its transition towards a cleaner, more resilient energy system that benefits present and future generations.

Through collaboration, investment, and support for youth participation, Uganda can unlock the full potential of its youth population as agents of change in advancing the country’s energy transition goals.

Oil-related revenues rise by 54% ahead of first oil?

Uganda’s oil sector activities are ramping up as the country transitions to becoming an oil producer next year.

According to a recent report by the Petroleum Fund, the taxation of oil and associated goods significantly boosted revenue for the financial year ending June 30, 2023, with the country generating an additional $11.66 million from oil tax.

The report also revealed that total oil revenues (both tax and non-tax) reached $33.42 million, increasing by 54% over the previous year’s revenue.

With $31.46 million, tax revenues constituted 94% of the total, while non-tax revenues accounted for the remaining 6%.

For tax revenues, the increase is attributed to heightened activity in the oil sector, including corporation and withholding taxes.

For non-tax revenues, the increase stems from surface rentals and training fees paid by Uganda National Oil Company and DGR Energy Turaco.

That's it for this week. Until next time, Cheers!