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In Summary
The Petroleum Exploration and Production Department has been drafting the National Content policy to address some of the issues.
Kampala- The Auditor General 2013/14 annual report has faulted the Ministry of Energy for being inadequate in ensuring national participation in the oil and gas sector.
The report indicates that as a result of the inadequate process, there are challenges in ensuring and monitoring participation of Ugandans in petroleum activities.
“For example, government has not delivered criteria for determining and justifying state participation in petroleum activities. For the years 2010 to 2014, there was limited effort by government at both central and local government levels to develop the capacity of local suppliers for the oil and gas sector.
Furthermore, the government has not established national content targets, standardised procurement procedures and clear definitions of Ugandan companies and goods,” a summary of the report reads.
Ensuring national participation is one of the objectives stated in the 2008 National Oil Gas Policy.
Contracts awarded to oil companies between 2010 and 2014 are valued at $330m, (Shs981 billion) according to the report, representing 28 per cent of total expenditure by oil companies. Notably, the government is further pinned for its inability to make sure Ugandan goods and services exist in the sector.
Oil companies’ pay structure
The report acknowledged the increment in the number of Ugandans employed in oil firms. The proportion of Ugandans directly employed by sector rose from 69 per cent in 2012 to 80 per cent in 2014. However, the report noted some “wide range of wage differentials between the nationals and expatriates.” These are employed by Tullow, Total, and CNOOC.
“In some cases expatriates, on average earned five to 10 times more than nationals. Some expatriates overstayed past the due date for nationalisation of their positions while others were working without permits,” the report reads.
mmuhumuza@ug.nationmedia.com