Ernest Rubondo Discusses How Flagship Energy Projects Are Driving National Growth and Local Industry Capacity

World Business Journal talks to Ernest Rubondo, Executive Director of the Petroleum Authority of Uganda, about the significant progress made on the four flagship projects in the oil and gas sector and the role of the regulatory framework in fostering national development, facilitating knowledge transfer, and creating employment opportunities within the industry.

What are the latest developments in Uganda’s oil and gas sector?

Uganda’s oil and gas sector features 4 key flagship projects: the Tilenga and Kingfisher Petroleum Production Projects, the East African Crude Oil Pipeline (EACOP), and the Refinery Project.

The Kingfisher project is operated by CNOOC Uganda, includes 4 oil fields and is planned to have over 30 wells drilled for its production. The total investment for this project is estimated at $2B. 13 out of the 15 wells required for commencement of oil production from the Kingfisher oil field have been drilled, and the project is now about 60% complete and is expected to reach a peak production of approximately 40,000 bpd.

The Tilenga project is operated by TotalEnergies, consists of 6 oil fields and is planned to have over 400 wells drilled for its production. The total investment for this project is estimated to be $5B. To date, over 107 of the 180 wells required for first oil have been drilled using 3 rigs. The project is approximately 48% complete and is expected to reach peak production of 190,000 bpd.

The acquisition of land for both the Kingfisher and Tilenga projects is now complete, and all affected individuals have been fully compensated.

The 1,443 km, 24-inch diameter East African Crude Oil Pipeline (EACOP) runs from Hoima in Uganda to Tanga in Tanzania and is estimated to cost $5B. EACOP Ltd is developing the project, with TotalEnergies holding 62% ownership stakes, CNOOC at 8%, TPDC at 15%, and UNOC at 15%. The EACOP project has 5 camps in Uganda and 12 in Tanzania, along with 6 pump stations (2 in Uganda and 5 in Tanzania). At the end of May 2025, over 70 km of line pipe had been connected on the Ugandan side, while over 200 km had been connected on the Tanzanian side of EACOP. The pipeline project’s land acquisition has reached 98%, while the overall project progress stands at 62%.

The 60,000-bpd crude oil refinery at Kabalega Industrial Park in Hoima District is planned to be developed by the Uganda Refinery Holding Company (URHC), a subsidiary of UNOC, with an estimated investment of $4B. The government of Uganda and the National Oil Company concluded an implementation agreement with Alpha MBM during April 2025 for investment in the refinery, thus paving the way for the commencement of pre-construction and subsequently construction work, which is expected to take 3 years.

What impact have regulations had on national development, knowledge transfer, and the integration of the oil and gas sector with other economic sectors?

Currently, the oil and gas industry directly employs close to 17,000 people, with 90% being Ugandans. An additional 150,000 indirect and induced jobs have been created, bringing the total jobs created by the industry close to 200,000. Ugandans occupy 64%, 85%, and over 99% of the management, technical, and support roles in the country’s oil and gas sector.

The government has worked with the private sector to enable 15 vocational institutions to attain globally recognised certifications in the oil and gas industry. 14,000 Ugandans have received training and achieved international certification in trades like welding, plumbing, scaffolding, etc.

Over 2000 micro, small, and medium-sized enterprises have had their capacity built in areas of bidding and financial management, together with aspects of HSE. The key objective of this capacity building has been to enable them to secure and implement contracts to provide goods and services in the sector.

Ugandan entities supplied a growing volume of goods and services to the industry, with $2.2B of the total $5.4B in contracts awarded by the end of 2024 going to local businesses.

Joint ventures between Ugandan and international entities are key avenues for supporting technology transfer in the sector. As of the end of 2024, we have approved nearly 150 joint ventures, and 35 of these have secured contracts worth $338M.

The government has conducted studies to identify linkages between the oil and gas sector and key sectors of Uganda’s economy, such as agriculture, tourism, banking, transport, health, and education. Properly harnessing these linkages could generate an additional $8B in value from oil and gas activities.

UNOC CEO Proscovia Nabbanja Details Upstream Growth Strategy and New Crude Blend Plans

World Business Journal talks to Proscovia Nabbanja, CEO of the Uganda National Oil Company, about the company’s growth trajectory as the oil and gas sector advances, the progress achieved in developing the Kasuruban block, and the efforts to build marketing and trading capabilities while progressing toward launching a new crude blend in the market.

How have the latest advancements in the upstream sector developed the operational knowledge of the Uganda National Oil Company (UNOC)?

Our role as a commercial entity and Joint Venture Partner (JVP) has required us to negotiate and execute complex commercial frameworks for various projects across the entire petroleum value chain, which has deepened our understanding of value extraction, risk allocation, cost recovery, and commercial structuring in large-scale petroleum projects. 

We have also gained substantial institutional knowledge in project design and execution, which has enhanced our technical understanding and refined our project delivery competencies. 

We are proactively building our crude marketing and trading capabilities and have developed a detailed roadmap for our crude trading business. We are currently working with an international expert to structure the operation and are progressing toward the launch of a distinctive Ugandan crude blend in the market. 

The award of the Kasuruban Contract Area marked a significant milestone in our journey toward becoming a fully-fledged upstream operator, capable of independently acquiring and developing exploration acreage.

What progress has been achieved in the development of the Kasuruban block, and what is the current status of securing a joint venture partner for future operations?

We have embarked on a work programme including seismic data reprocessing and an ongoing Environmental and Social Impact Assessment (ESIA). Parallel to our technical activities, we are actively pursuing a joint venture partner as required under the licence that was issued. We are in the process of identifying a partner with the right blend of technical capability, financial strength, and shared commitment to national value creation. 

Looking ahead, we plan to progress to the acquisition of 3D seismic data and undertake key engineering studies in partnership with the selected JV partner. These efforts are expected to culminate in the submission of Field Development Plans to the Petroleum Authority of Uganda by the end of 2025.

In 2024, UNOC became the sole importer of petroleum products. What impacts have been observed on supply chain security and pricing since this change?

Direct sourcing and importation of petroleum products have provided our country with end-to-end supply chain visibility, enabling timely interventions with stakeholders to ensure supply continuity and security.

The direct transactions with the Ugandan OMCs have also eliminated unnecessary layers of intermediary transactions and the associated speculation

Giving a uniform price per product type and vessel delivery to all OMCs has boosted competition for market share, leading to better consumer and retail prices.

PS Irene Batebe on Uganda’s Energy Expansion, Refinery Progress and Mining Resource Strategy

World Business Journal talks to Irene Batebe, Permanent Secretary at the Ministry of Energy and Mineral Development, about the ambitious goal of achieving 52,000 MW of generation capacity by 2040, the importance of quantifying mineral resources, the advantages of the new 60,000 bpd refinery at Kabaale, and the vast investment opportunities within the mining sector.

Can you provide an overview of the ongoing hydro, solar, and nuclear energy initiatives aimed at reaching 52,000 MW by 2040?

The 2023 energy policy aims to boost generation capacity from 2,051.6 MW to 52,000 MW and achieve universal electricity access, currently at 60%. We plan to diversify our generation—currently 93% hydropower—by adding 28,000 MW from solar, bioenergy, and gas, along with 24,000 MW from nuclear.

We are advancing three hydropower projects on the River Nile: Ayago, Kiba, and Oriang. In geothermal, we aim to unlock 4,500 MW through exploration in Western Uganda, particularly near Kikube and the Pakwach Basin. We are finalising a grid stability study for solar integration and developing mini-grids for remote areas.

In collaboration with the IAEA, our nuclear programme includes preparatory studies and design work. We are also enhancing transmission through a new grid development plan and regional interconnections via the East Africa Power Pool.

The Electricity Access Scale-up Project (EASP), in collaboration with the World Bank and other projects, intends to increase the number of connections from 2.3 million to 4.3 million over the next three years.

Supporting local companies in supplying goods like transformers and meters will boost the economy. Our focus includes advancing energy efficiency, managing demand, and promoting alternative cooking solutions such as liquefied petroleum gas and biogas, while ensuring the sustainable use of biomass to address energy transition challenges and resource depletion holistically.

How is the mineral exploration programme aimed at quantifying mineral resources progressing?

The mineral exploration programme is advancing as a core objective of NDPIV, focusing on quantifying resources such as iron ore, gold, copper, lithium, and nickel. With increased government financing and the establishment of a new national mining company, we are optimistic about tapping into the country’s mineral potential.

A specific project has been approved through a production sharing agreement with Sarrai Group that will hold 85% and the Ugandan National Mining Company 15%. This partnership aims to enhance exploration, especially in copper, while the government manages most of the quantification to ensure accurate data for investment.

What advantages will the Kabaale (Hoima) oil refinery project provide for the region’s energy security?

The refinery project, initiated due to oil discovery and regional demand for petroleum products (around 250,000 bpd), is essential as regional refineries in Mombasa and Tanzania are closed, creating supply insecurity. With an initial capacity of 60,000 bpd and potential expansion to 120,000 bpd, the refinery will also supply western Kenya, northern Tanzania, eastern DRC, and South Sudan, improving regional energy security. The project is financially viable, offering a 15% to 20% return on investment. Funded through a 100% equity model, the Uganda National Oil Company (UNOC) will contribute 40% and Alpha MBM Investments 60%. The estimated cost is $3-$4B, with UNOC expected to mobilise $1.2 bn to $1.6B over 3 years, ensuring a sustainable fuel supply for Uganda and the region.

What investment opportunities are available for investors in the mining sector?

Investors can explore opportunities in gold, iron ore, rare earth elements, copper, nickel, manganese, chromite, lithium, and uranium, among others.

The airborne geophysical survey for Karamoja and Kadam-Moroto has identified significant mineral resources. There are opportunities in beneficiation and value addition projects, with 9 gold refineries and expanding tin and iron ore smelting plants. To assist investors, an online mining cadastre system has been established, serving as a primary resource for engagement with us.