Uganda begins to bridge skills gap as it moves towards oil production

Posted May 30, 2011 by Ugandan Diaspora News Team in Business ~ 4,251 views


By ESTHER NAKKAZI | Peter Anguyo, a casual labourer for a local company, Excel Construction Company, is working at Bulisa Health Centre IV.

Smiling amidst the heat, he ferries bricks to the nurses’ block about to be roofed. He now earns more than twice as much what he earned on other sites, Sh20,000 ($0.9) from Sh8,000 ($0.4) per day.

Before Uganda produces its first drop of commercial oil in 2012 as promised by Tullow a United Kingdom based oil and Gas Company, many Ugandans like Anguyo are already employed and numerous firms are supplying goods and services.

However, the employed are still few and in junior positions, largely due to lack of technical knowledge, low-tech skills and lack of finance to invest in the high-tech and capital intensive oil industry. The world over, the best value from the oil industry “is not the revenue but the opportunities people seize from the industry,” said assistant commissioner in charge of geology at the Petroleum Energy Production Department (PEPD), Robert Kasande.

Excel Construction is an Indian-owned, Uganda registered company sub-contracted by Tullow Oil to build the health Centre IV for the Bulisa communities.

Companies like MSL Logistics, Bemuga Forwarders Ltd, MBW Consulting, Equator Catering, Kasese Nails, Strategic Logistics (SSL), Saracen, G4S and many others are offering catering, clearing and forwarding, security, transport and road construction services. “You can make money at every stage of petroleum operations. A lot of people have made money already in drilling, logistics and accommodation,” said chief technical advisor oil and gas industry, Reuben Kashambuzi.

Casual labourers

According to Jimmy Kiberu, corporate affairs manager at Tullow Oil Uganda, there could be up to 10,000 jobs created when the oil industry operations are under way. Mainly, the jua kali or casual labourers will be employed at the rig sites, for drilling, to build the refinery and the pipeline.

“Uganda has a lot of “jua kalis” who should benefit by transforming their low-tech welding techniques to those the industry needs but this is not like welding beds or window panes in Katwe,” said Kashambuzi.

The industry is soon moving from the exploration to the production stage, which is labour intensive. By 2015, about 20,000 barrels per day will be produced by Tullow Oil said Kiberu. “Delay things if necessary to build the required capacity,” advises Kashambuzi.

At Mpyo C last week, the rig —hired at $0.4-0.8 million per day— that was drilling for oil had almost only expatriates, which showed the lack of local content. But this is also an industry that cannot tolerate mediocrity and mistakes could lead to disasters. A clear example is the Gulf of Mexico catastrophe. In this complex industry, “many things can go wrong and even if the error in an activity may appear minor, the effect is cumulative,” said Kashambuzi calling for more training.

There are efforts by the oil companies and the government to train. Last year, Tullow, initiated the Tullow Oil and Gas scholarship to provide opportunities to young and talented Ugandans to further education and development in oil and gas.

This year four students are on their way to the University of Manchester to pursue postgraduate degrees in petroleum geosciences courses.

This will increase the number of geoscientists and geophysicists badly needed because at the moment the numbers in some specialised areas are appalling. For instance, Mr Kashambuzi said, there are only two specialised oil lawyers in the country he knows about. One is from the private sector and the other a recently qualified young woman with no experience to take on the cutthroat lawyers that Tullow Oil may present.

We may think we have qualified accountants in the East African region but has the best qualified of them ever handled a budget of $10 billion? asked Kiberu. When you send out job adverts for oil engineers, you will be lucky to get even five applications from the region, he said. Makerere University in 2009 introduced a Geosciences undergraduate degree and Kigumba Oil Petroleum Technical Institute in Hoima now offers specialised training for the oil industry.

In future, teaming up with universities that teach these disciplines is proposed together with a university in East Africa that offers petroleum dedicated courses. But for now, the training efforts by these two institutions are a drop in the ocean. If the over 100,000 jobs are to be filled, Ugandans should now be training to gain skills to use at every stage of the oil industry.

“By now we should be sending plane loads of people to train. Some should be returning while others are going. Government should put resources where its interests are,” said Kashambuzi.

There are efforts to especially send Ugandans to India, which has oil similar to Uganda’s.

Government is also sending students to Trinidad and Tobago and has signed a Memorandum of Understanding with SONATRACH of Algeria to train Ugandans.

The law is another alternative that could be used to increase the numbers employed in the industry. Although some agreements between government and oil companies recognise and require a certain measure of local content in employment and supply of goods and services, they do not have a clear framework and mechanisms for their implementation.

However, at the PEPD, now renewal of a licence depends on the fulfillment of a work programme and in future it should include the extent to which companies employ Ugandans.

Beyond registration

Local content means some money for goods and services remains in Uganda while at the same time local capacity is built or strengthened.

The debate around it is that local content should go beyond registration of companies locally to details like who owns and manages firms supplying goods and services to oil companies.

In a new industry, it will take time to develop the necessary capacity to develop quality goods and services.

An oil and gas consultant suggests that services may be provided by foreigners now but a deliberate effort must be made to progressively increase local participation including encouraging or enforcing partnerships.The consultant also advises that the Government should vet all positions and recruitment to ensure that the occupants of those positions are truly qualified, which is ‘important because when a company hires a poorly qualified person, especially an expatriate, there is no transfer of knowledge or technology, no value for the huge expenditures on these individuals and because these costs for oil companies are recoverable, the government loss is compounded.’

In effect, Ugandans may not invest in drilling and seismic data equipment, but it has surveyors who need little orientation to deliver quality work. The Government should also identify the needs of the oil industry and select the local companies or entrepreneurs, who can be helped to develop the capacities to provide these needs.

Article Source: Business Dailly Africa

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Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.


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