National Budget: 188 Billion allocated to oil and gas projects
The Uganda Government has earmarked 188 billion shillings towards the implementation of its oil and gas plans in the 2016/17 financial year.
In the budget that was read out yesterday by Finance Minister, Matia Kasaija, the funds will be used to develop the country’s oil and gas resources, boost skills and institutions in the sector, particularly operationalizing the National Petroleum Authority (NPA) and establishing the National Oil Company (UNOC).
This comes a week after the UNOC Board appointed Dr. Josephine Wapakabulo as the company’s new Chief Executive Officer. The company will handle government’s commercial interests in oil and gas including government’s 15 percent interest in the Production Sharing Agreements (PSAs) with the licensed oil companies and the 40% share in the oil refinery.
Kasaija also revealed that the negotiations with the refinery Lead Investor—Russia’s RT Global Resources—are expected to be concluded by September this year.
Already, land acquisition for the refinery development is 97 percent complete and 533 acres of land have been acquired in Hoima district for the physical resettlement of the Project Affected Persons who opted for resettlement.
According to Kasaija, the Hoima-Tanga crude oil pipeline will be developed as a private investment, to ship Uganda’s crude oil to the East African Coast. A survey to determine the pipeline route has been concluded by Danish firm, Ramboll and Uganda’s Newplan Uganda. Strategic Friends International (SFI), which carried out the Resettlement Action Plan (RAP) for the refinery project, was recently selected to conduct the RAP for the pipeline project as well.
In his remarks yesterday, President Yoweri Museveni reiterated that Uganda would start producing oil by 2020.
“By 2020, we shall start pumping out our oil,” the President told the audience that comprised of political and business leaders as well as the international community. “Even at the low price of US$50 per barrel, if we shall be pumping 30,000 barrels per day for the refinery and 170,000 barrels per day for the pipeline, the total will be 200,000 barrels per day, that will give us an additional income of US$3 billion per year. The Government portion of that money will be US $2.1 billion which is 70 percent.”
The other priorities in the budget include manufacturing, industrialisation, ICT, road infrastructure and agriculture.
Report by HM