Oil and gas: Museveni, Kadaga disagree over Local Content Law

President Yoweri Museveni is worried that investors in the oil sector will be turned away because of the provisions of the Petroleum (Exploration, Development and Production) Act which require companies in the sector to have at least 48 percent holding by Ugandans.

Speaker of Parliament Rebecca Kadaga told MPs attending a conference on the oil and gas sector at the Serena Lake Victoria resort that Museveni wants to take the law back to Parliament for amendment.

“I had a meeting with the president and he told me that he is not happy with the local content laws because the investors are not comfortable with them, he said, “I am going to send them back to you,” but I told him that, your excellency, you bring them back, we shall send them back to you the same way they are,” Kadaga said.

Speaker of Parliament Rebecca Kadaga (L) and energy minister Irene Muloni arrive at the conference

Energy Minister Irene Muloni told journalists on the sidelines of the conference that Museveni’s discomfort with the laws is the requirement for Ugandans to have shareholding in a company for it to be licensed to take up work in the sector.

“We are talking about capital intensive investments and Ugandans don’t have that much money; the President therefore says, instead, the companies should enter into partnerships with Ugandan owned companies,” Muloni said.

Kadaga also expressed concern that government has not done enough to prepare Ugandans for jobs in the oil and gas sector.

Kadaga speaking to the participants at the oil and gas conference.

The sector promises more than 25,000 jobs for Ugandans but Kadaga wonders how Ugandans will take up the jobs without training.

“We must find an avenue for Ugandans to train so that they are ready when the right time comes,” Kadaga said.

Following an agreement reached last week by the sector investors and the government, the first oil drop is expected in 2022.

Construction of the 1,445km pipeline is expected to commence in July this year.

The pipeline which is projected to cost $3.55 billion (Shs 12.8 trillion) will run through 10 Ugandan districts from Buliisa to the Tanzanian port of Tanga where Uganda’s crude oil will be sold to the world market.