UGANDA, Kampala:

The Government of Uganda has invited companies to buy 45,211 barrels of crude oil worth about Shs13 billion currently stored in specialised containers at four sites in Buliisa and Nwoya districts in Bunyoro and Acholi sub-regions respectively.

The Uganda National Oil Company (UNOC), the statutory agency charged with managing the government’s commercial interests in the oil industry, invited bids from companies in a notice published in the media yesterday.

The bid notice indicated that the qualified buyers/companies will be shortlisted directly for negotiations upon presenting satisfactory crude utilisation plans, and demonstrating quality, health, safety and environment (QHSE) management measures.

The crude oil for sale is currently stored in tanks at four oil fields of Kasemene 1, Ngara-1 and Ngiri-2 in Buliisa and Nwoya districts respectively. The test or trial crude oil has been lying in storage for about seven years. It was generated during the extended well testing (EWT) by oil companies Anglo-Irish Tullow Oil and French Total E&P.

The EWT is the process of evaluating both the characteristics of petroleum (oil and gas) reservoirs and establishing properties of crude oil to adequately plan for its production.

UNOC chief legal and corporate affairs officer Peter Muliisa declined to put a value to how much the government will earn from sale of the crude oil.

“There are several differentials you have to factor in before arriving at how much we could actually earn,” Mr Muliisa said.

However, at the prevailing trading price of $74 (Shs280,000) per barrel of Brent crude oil, the global benchmark, the 45,211 barrels could fetch about $3.3m (about Shs13b).

Nature of Uganda’s oil

Uganda’s (Brent) crude oil has low sulphur content, making it heavy, waxy and solidifies at room temperature or “sweet and heavy.”

One of the variables, besides transport costs, is to compare properties of Uganda’s crude oil to that from other countries such as in the Middle East and Nigeria to determine its fair worth.

“After taking into consideration everything and other factors kept constant, you could lose or gain some cents [on the international market], which is why we cannot put a figure right now,” Mr Muliisa said.

In January, UNOC announced a similar bid process to sell the test crude oil, with a closing date of March 9 for receiving bids, but the move did not materialise.

“We got a few expressions of interest but when we reviewed them, only one was reasonable. So we decided to go back to the market to attract new buyers,” Mr Muliisa explained.

He added that while money is a key consideration, “we are also paying due attention to the health, safety and environment aspects of managing the oil, including the caution required in transporting it from one location to another.”

In January, the Auditor General John Muwanga submitted a report to Parliament, blaming UNOC for failing to dispose of the test crude oil.

There have been attempts since 2012 to dispose of the oil but they were hampered by technical constraints such as the absence of an enabling legal regime. The required law has since been put in place following the enactment of the Petroleum (Exploration, Development and Production) Act 2013, which established UNOC that was incorporated in 2015 as a private company but wholly owned by government. The Energy and Finance ministries own 51 per cent and 49 per cent shares respectively. The company’s operations commenced in 2016.

Potential local buyers of the test crude oil include, but are not limited to, cement factories and thermal power generation plants, which import heavy fuel oil to generate electricity.

However, Mr Muliisa said in the absence of “a reasonable buyer”, they will continue storing the oil until the refinery is completed.

The government plans to construct a 60,000-barrel per day refinery in Hoima District to produce liquefied petroleum gas, diesel, petrol, kerosene, jet fuel and heavy fuel oil, among others, for both the local and regional market. At least 5 per cent of the 60,000 barrels will be used for heating the refinery.

According to the ministry of Energy, Uganda’s fuel/petroleum products imports as of last September averaged at 85 million litres, with demand growing at 7 per cent per annum. The 85 million litres comprised 34.6 million of petrol, 42.5 million of diesel, and 2.6 million of kerosene. Jet fuel imports stood at 5 million litres. In April, government signed a project framework agreement with the Albertine Graben Refinery Consortium (AGRC), a joint venture of American and Italian firms, to design, finance, construct and maintain the refinery, which is expected to cost $3b (Shs11 trillion).

The general manager of the Uganda Refinery Holding Company, Dr Michael Mugerwa, last week described the refinery as a “worthwhile investment” given its “extremely attractive internal rate of return.”

It is not clear when Uganda will start commercial oil production after it became apparent that the earlier target of 2020 cannot be met given the required high capital investment.

The government requires about $1b (about Shs3.8 trillion) to finance its equity stake in the upstream and midstream projects to enable it start commercial oil production.

UGANDA, Tororo- The installation of the Shs7.4 billion solar plant in Tororo District is set to improve access to power and also boost trade in eastern region, leaders have said.

The solar plant has more than 32,240 photo voltaic panels and sits on a 14-hectare piece of land in Asinget Village, eight miles off Tororo-Jinja highway. It will generate about 14 Gigawatt hours (GWh) of clean energy per year. GWh is a unit of energy representing one billion watt hours and is equivalent to one million kilowatt hours. Gigawatt hours are often used as a measure of the output of large electricity power stations.

The project, which is developed under the Global Energy Transfer Feed in Tariff support scheme for renewable energy projects managed by Germany’s KfW Development Bank in partnership with Uganda’s Electricity Regulatory Agency (ERA), is funded by the governments of Norway, Germany, and the United Kingdom.

During the commissioning of the solar plant last year, State minister for Mineral Development Peter Lokeris said it will produce enough power to supply more than 170,593 homes for both domestic and commercial use.

He added that the government is focusing on the clean renewable energy sector, which produces electricity from wind, solar, hydro and biomass in order to reduce on carbon emissions.

“This is one of the interventions geared at ensuring consistent power supply, most especially to serve emerging heavy duty cement factories and the rest of the districts in the eastern part of the country,” Mr Lokeris said.

The minister added that new factories, including the phosphate mining factory, will need reliable power to operate and that the solar plant will close the gap.

Ms Helen Emagalet, a trader in Asinget Trading Centre, says the establishment of the plant is an opportunity for small scale entrepreneurs to boost their businesses. “This is a good opportunity for us as business entrepreneurs in this rural area because we will be in position to operate our computers and refrigerators, which has not been possible due to lack of power,” she says.

Appeal over tariffs

Mr James Akabwait, another trader, requested government to ensure that power tariffs are affordable to the ordinary people.

Mr Julius Wandera, the ERA senior communications officer, said the tariff for power from the solar plant will be at 16.9 US cents per kilowatt hour (KWh) for a period of 20 years.

“The consumers will only pay 11 cents per KWh while the remaining 5.9 cents will be covered by the development partners,” he said.

Mr Wandera explained that during the seven months of the plant’s construction, more than 350 jobs were created and more youth will be employed when it finally gets connected to the grid.

“More youth will be employed to assist with the operation and maintenance of the facility,” he said, adding that jobs in solar heating and cooling, installation, sales, research and development will also be created.

Mr Fredrick Angura, the Tororo South County Member of Parliament, said the initiative will address the electricity needs of the communities and spur urbanisation.

“With electricity available, our people will be in position to engage in small income generating projects such as selling water,” he said.

Tororo was in 1960’s considered as the second largest industrialised district after Jinja. It formerly had such as Tororo Industrial Chemicals and fertilisers (TICAF), Uganda Jute and Hessian, Tororo Steel Works, Tororo Oil and Soap Works, Universal Abestos and South Bukedi Cooperative Union ginnery, which have since collapsed.

Mr Angura appealed to government to consider lighting the neighbouring communities as a token of appreciation to the residents for accepting to give out their land to build the plant.

“It will be unfair for the village Asinget to remain in darkness yet it hosts the biggest power station,” he said.

Cement companies Simba and Hima, which have set up new factories in the district, are all expected to benefit from the power. Mr Morgan Gagrani, the executive director Tororo Cement Industries Limited, says the plant will address power shortage and quality, which he says has been lacking and affecting their production.

“We have been facing power shortages, which affects our operations but we are now excited,” he said.

editorial@ug.nationmedia.com

Two foreign UN contractors who were kidnapped in DR Congo have been found dead, one of them decapitated, the government said Tuesday, as spiralling violence in the vast country sparked international condemnation.

The bodies of American Michael Sharp and Swedish national Zaida Catalan were found as the UN Security Council prepared for a vote on Wednesday, on extending its peacekeeping mission in the Democratic Republic of Congo.

UN Secretary-General Antonio Guterres vowed that the world body would do "everything possible" to bring justice in the case.

"Michael and Zaida lost their lives seeking to understand the causes of conflict and insecurity in the DRC in order to help bring peace to the country and its people," the UN chief said.

"I trust that the Congolese authorities will conduct a full investigation into this incident. The United Nations will also conduct an inquiry. In case of criminal acts, the United Nations will do everything possible to ensure that justice is done."

The two were kidnapped by unidentified assailants on March 12 along with four Congolese accompanying them in Kasai-Central province.

Government spokesman Lambert Mende said the woman's body had been decapitated.

The remote region has been plagued by violence since mid-August, when government forces killed Kamwina Nsapu, a tribal chief and militia leader who had rebelled against President Joseph Kabila's central government.

The violence has spilled over from Kasai to the neighbouring provinces of Kasai-Oriental and Lomami, leaving at least 400 people dead.

Several days before the two UN experts were kidnapped, a Uruguayan peacekeeper was shot and injured in the same region.

Sharp's father, John Sharp, said there was a "high probability," the bodies were those of his son and Catalan.

"Dental records and DNA samples will be used to confirm the identities. This will take some time," he added on Facebook.

39 officers killed

On Monday, Congolese national police accused rebels of massacring 39 of their officers in Kasai.

The victims were killed in an "ambush" early Friday as they were travelling in trucks, and buried in a mass grave by supporters of the late Kamwina Nsapu, a police spokesman said.

Jordan Anderson, Africa analyst for IHS Markit, cited reports that all 39 had been beheaded.

The Kamwina Nsapu militia "is increasingly taking violent and hostile action against anyone it sees as being outsiders, interfering in the Kasai," he said.

The United Nations, European Union and African Union on Tuesday expressed "grave concern" over the spiralling violence in Kasai.

The organisations "condemn this despicable act and express their condolences to the families of the victims," they said.

They called for an "urgent response from the country's political leaders" to curb the violence and "urge the defence and security forces to exercise restraint in the efforts to restore order in the Kasai."

The UN Security Council is set to vote on Wednesday on extending its mission in the DR Congo, the largest and costliest UN peacekeeping mission in the world.

The UN has 19,000 soldiers, police and military observers deployed in the mission, costing $1.2 billion annually.

About 100 of those troops were recently dispatched to the Kasai region.

'Playing with fire'

France warned last week that drastic cuts to the mission would be tantamount to "playing with fire" as the DRC is also embroiled in election turmoil.

France has circulated a draft resolution to renew the mandate of the peacekeeping mission, but is facing scrutiny from the United States which is seeking cuts to UN peace operations.

The influential Catholic Church in DR Congo brokered a deal in late December to pave the way for elections by the end of 2017, but the agreement has been bogged down in disputes over the appointment of a new prime minister.

Elections would bring an end to the rule of Kabila, in power since 2001.

The Church and the electoral commission said earlier this month that the growing unrest in Kasai threatened to derail voter registration.

Police reinforcements meanwhile were sent to strategic points in the capital Kinshasa on Tuesday after clashes between demonstrators and officers in several districts, where tyres were burned and roads blocked.