By Barrel Reporter
On Wednesday, November 6, 2024 the eloquent Tony Otoa, Uganda National Oil Company’s (UNOC) Chief Corporate Affairs Officer agreed to an impromptu interview with Barrel’s Bravo Ronnie Kaungi on the sidelines of African Energy Week (AEW) 2024, in Cape Town, South Africa.
B: Its lovely meeting you in Cape Town, Tony, rather than in Kampala! What is UNOC’s objective, as a participant in African Energy Week?
T: It’s threefold. First and foremost, continue being participatory, in this great opportunity for African companies, coming out to demonstrate that we’re still very present, participating, being committed and intentional to the oil and gas story in our country, which is Uganda. Secondly, it’s really the idea of looking out for investment. As you saw, we had the ‘Invest in Uganda’ segment, which we took well care of. It was really about trying to get the right investors in our country. Investors who are very key in helping and supporting us develop our oil and gas resource, but more importantly, telling the right Ugandan story or narrative. Thirdly, of course, is to demonstrate that as a national oil company, we are very much in motion, when it comes to what we are trying to achieve in our oil and gas projects. We have our Kasuruban Block, which needs investors, but also it’s very important and relevant in this conference. So, I think it’s been a great one. What we set out to do has been achieved. As we do this, we have a couple of days left, where it’s about infusing ourselves in more conversations, with like-minded companies, to try and get the right partners on board, to come and support us in Uganda; but also have our Ugandan expertise go out and support them in their countries.
B: The theme of this conference is ‘Investment in African Energies.’ What is UNOC doing, to create an enabling environment for investors?
T: You’ve rightly said UNOC is a national oil company, it’s a company that’s in the country to stay. Unlike other international oil companies (IOCs) that come in and go out! Now, by virtue of the fact that it’s a national oil company, one that’s there to stay, it’s imperative that the company promotes its ability to exploit its resource, but also bring in investment. But also what’s really important in that aspect, Bravo, is that the local company have to have the kind of networks and partners who will support it long-term, in a sustainable way. That’s strategic investment. Investment doesn’t only look come in for one or two years, but we are talking about twenty years and beyond. I think that’s why this is important. Strategically aligning, as a national oil company, bringing in the right investment, to support our growth and our development of the resource in the country.
B: Maybe if you could dig a bit deeper, on this conference’s theme. There has been a major focus that I have picked out from this conference, which is growing the domestic market, in order to stop Africa from being an export-orientated continent, in terms of our petroleum products, and growing the synergies of the local markets, so we can market our oil and gas products elsewhere. In Uganda we are trying to develop our Refinery, in order to feed the local market and that has been a very big theme in this conference. Talk to us about how UNOC is investing in growing the domestic market, in line with how the Refinery is going to feed into the market.
T: I think it’s not really about UNOC growing the domestic market. It’s already there, it’s growing on its own. The demand for energy, in Uganda, is quite crazy! We have a huge increase in the population, apart from that the demand for energy is also high. So, our investments and plans, in terms of the Refinery and oil and gas exploration, are geared towards that; where at one point in time we are actually taking care of the nation’s needs and demands beyond exporting it. More importantly, Bravo, is the fact that as an oil company, we are part and parcel of the government planning, in terms of national planning and the National Planning Authority’s mandate. So, it’s very important for us to synchronise with that and look at how many people are going to come into this country, or born in the country over the next few years? What are their demands? We’ve just talked about the demand for electricity and rightly so. You can also see the demand for oil and gas products, more people are going to drive, more industries are going to run, they need all these products to run. The petrochemical industry is important, the fertiliser industry is important, if we are going to keep growing our food. Like I said, it’s a very important opportunity, for us as a country, through UNOC, to invest, looking at the country and regional demands. If you look at the Refinery, for instance, it’s a 60,000 barrels of oil per day refinery. The products that we process, that potentially come out of that will feed Uganda and the East African region. I think that’s a good story for Uganda.
B: How is UNOC strategically aligning itself, to maximise the value of Uganda’s oil?
T: I think it’s already evident. If you look at where we are participating, in the upstream projects, in Tilenga and CNOOC and Kasuruban now, we are participating in the midstream, EACOP, and we are participating in the downstream, where we are now importing fuel products for the country. Meaning that we are now taking care of the whole value chain. What that means is that all times, we are participating in the same value chain. So, how do we bring value to the country? I like that question. Is by maximising our participation in these areas, by maximising our development of the Kasuruban upstream project, which will in a way flow into the Refinery project, which is the midstream; also flow into the downstream project, because by the end of the day we shall give these products to the Ugandan consumer, or the regional consumer. So it’s already evident, it’s just about amplifying, when the time is right, it will happen, but for now we are in sync with that course.
B: From what I see, as someone who is a keen follower of the industry, one of the values that UNOC has brought into the Ugandan market, is in a short period of time we (Ugandans) have seen the pump prices begin to come down. Can you speak to me more about where you envision UNOC’s role, as a sole importer of petroleum products, and how the market is going to look like in the next five to ten years in Uganda?
T: Well, I’ll say it in two ways, you can predict and you can also not predict. You can predict based off what’s happening around the world, but you can also use facts to know what’s happening. In terms of predicting, I’ll start off with that. It’s very difficult to predict right now, because we have so many issues happening around the world. While we are trying to stabilise the importation of petroleum products into the country, there is war going on in the Middle East, there is war potentially starting between Iran and Israel that could have a huge impact on prices and so on and so forth. But if you go the logical way, and say this is what we are going to do and this is how things are going happen, you can clearly see that by UNOC doing sole importation for the country, that means we are cutting out so many middlemen and we are reducing the cost of doing business, meaning that at the fuel pump, at all times you will find that the fuel prices are up or down. Fuel prices will keep going down but, like I said, sometimes it is difficult to predict what could happen in the next few, weeks in the Middle East. So that has a huge impact, because you know we import our products from the Middle East.
B: As I conclude, can you give me an overview of where we are, in terms of the main projects that UNOC is undertaking at the moment?
T: I think, in terms of the main projects, especially the ones where we are non-operating partners, we are on course for First Oil. I think the Tilenga Project and Kingfisher Project, those very amazing projects, where we are doing well. Kasuruban we are getting investment, to support developing that oil field, which will be a huge bonus and again opportunities in the area of local content. The EACOP pipeline is progressing very well, an amazing distance has been covered (laying pipes) in Uganda and in Tanzania meaning we are on course, in terms of timelines. Most important of all, is the downstream mandate that we have, which is expanding by the day and we are bringing in more vessels by the day, meaning we are in line with our mandate to make sure that number one, fuel reserves are in the country, at all times, so prices are kept stable, and number two Ugandans can have fairly stable fuel products. Finally, in regard to the same, our Kampala Storage Terminal (KST) is taking centre stage in our plans and it should be up and running and that will actually reinforce our downstream operations.
B: What about the Refinery?T: We are in talks with Alpha MBM and finalising talks. Once all of that is done, we can then begin the construction of the Refinery. I don’t know if you’ve been to Kabalega Industrial Park (KIP)? You’ll find that infrastructure is up and running, the airport is over 95% complete. So, everything is in progress.
