Total E&P Uganda has signed five packages for drillings of oil wells in Nwoya and Bulisa districts under the Tilenga project.
The approximately $2 billion deal will also provide for surface facilities in engineering, procurement, supply, construction and commissioning (EPSCC).
These conditional awards are a first step that allows for the launching of the detailed engineering and procurement activities before the final approval by the partners.
Total E&P Uganda General Manager Pierre Jessua in a statement on Monday the selection of the five companies followed what he described as a comprehensive and thorough tender evaluation and contracting process.
“The launch of these contracts underscores our commitment to developing the Tilenga project while maximising the value and viability of the project, and observing the most stringent Health, Safety, Social, Environment and Quality standards to which the contractor must adhere,” said Pierre Jessua, general manager, Total E&P Uganda.
He said the companies above have also made significant commitments to promoting National content through employing Ugandans, use of Ugan- dan goods/services and technology transfer.
“Thanks to this first step, the Tilenga project development phase has a target to achieve the first oil in 43 months. All the companies will deploy their years of expertise and best-in-class technology to delivering the project while also ensuring sustainable value retention in the economy through promotion of national content,” said Jessua.
Among those awarded is a consortium of a subsidiary of McDermott International, Ltd and Sinopec International Petroleum Service Corporation. The formal contract award remains subject to Tilenga Partners approval. Others include; Schlumberger Oilfield Eastern Limited for three (3) well-engineering packages and Upper Completions, Artificial Lift, and Associated Services.
A Ugandan company ZPEB Uganda Co. Limited is one of those to take a pie of the lucrative deal. It is to win one rig package for Onshore drilling rigs, tubular running and fishing services.
The Tilenga project is expected to attract over USD10 billion in investments in Uganda and Tanzania. It includes six oil fields and will feature 426 oil wells at full production will generate up to 200,000 barrels per day (BPD).
It will consist of 31 well pads connected to a central processing facility (CPF) via buried flow lines. A central processing facility located in Buliisa, outside the Murchison Falls National Park. Reports about this deal were last week broken by McDermott International, Ltd and Sinopec International Petroleum Service Corporation.
“This is a the first step which allows launching the detailed engineering and procurement activities before the final approval by the Partners. This prestigious project demonstrates the continuity and strength of our business relationship with Total Energies and their partners CNOOC International of China and Uganda National Oil Company (UNOC),” said Tareq Kawash, senior vice president, Europe, Middle East, Africa.
“This is a momentous and essential project for Uganda for the development of its national companies and citizens—and as we continue to grow our footprint in Africa, we are committed to expanding local content opportunities in the communities in which we operate.”
The project will stimulate economic growth in Uganda and create up to 20,000 direct and indirect jobs, bringing a significant number of meaningful training opportunities for the local labour force.
McDermott is committed to implementing these projects in a manner that fully addresses the sensitive environmental context and the needs of all stakeholders in the area.
“This important step further strengthens years of successful collaboration with Total Energies on a wide portfolio of world-class projects in the Offshore, Petrochemicals and LNG segments – where Total Energies is a major stakeholder,” said Samik Mukherjee, McDermott’s Group senior vice president for Projects.
The project will be led from McDermott’s offices West of London, United Kingdom and Sinopec’s office in Yangzhou, China, before transitioning to Uganda for the construction activities. Work began in the second quarter of 2021 and the first oil is expected in 2025.
Clearing domestic arrears pushes up govt spending
- During May, government spent Shs444.8b more than it had panned, some of which went to payment of domestic arrears in form of supplementary expenditures.
- Government spending during May grew by Shs444.8b against planned expenditure.
- According to the Ministry of Finance Monthly Performance of the Economy report for May, total government spending amounted to Shs2.591 trillion against Shs2.146 trillion that had been planned for the period.All items except external interest payment, recorded higher than planned expenditure with “additional resources availed to various ministries, departments and agencies in form of supplementary budgets for quarter four of the financial year”.
- Of the expenditure, according to the Ministry of Finance, Shs103.5b was paid out during May to clear part of the outstanding domestic arrears, which was Shs60.61b higher than what had been programmed.
- As of April, domestic arrears stood at Shs4 trillion with some debtors going for as long as 10 years without being paid.
- During May government expenditure was above domestic revenue collection, which stood at Shs1.516 trillion against a target of Shs1.603 trillion thus creating a Shs87.2b shortfall.
- The report indicates that tax collections stood at Shs1.4 trillion against a target of Shs1.5 trillion thus Shs99.9b shortfall.
- During the period, direct domestic taxes registered the biggest shortfall (Shs71.77 billion) while Pay As You Earn, Withholding Tax, Corporate Tax and Presumptive Tax all performed below target.Indirect domestic taxes registered a shortfall of Shs14.75b during the month with the bulk of it mostly being visible under Value Added Tax, especially in the construction, real estate, hotel and restaurants subsectors.
- International trade taxes also registered a shortfall of Shs13.73b, following a reduction in the volume of imports on which VAT and Import Duty are charged.
- Non-Tax Revenue collections, on the other hand, were more than targeted during the period, registering a surplus of Shs12.71b mainly due increase collections from driving permits, passport fees, migration fees, and penalties for traffic offences.
- Overall, the report shows government operations in May 2021 resulted in a deficit of Shs1.037 trillion, which was higher than the projected Shs469.07b.
- During May, revenues and grants were lower than targeted, registering a shortfall of Shs123.24b or 7.3 per cent while expenditure and net lending was higher than programmed by 20.8 per cent or Shs445.6b.
- Tax shortfalls
Revenues and grants, the report notes amounted to Shs1.554 trillion in May against a target of Shs1.677 trillion. Of the total amount during the month, Shs1.516 trillion billion was domestic revenue while Shs37.99b was in form of grants from development partners.
