Joint Ventures: The Key to unlocking Uganda’s potential in the fast-growing oil and gas

Uganda’s burgeoning oil and gas sector presents unprecedented opportunities for local businesses, but significant hurdles remain. In a strategic push to empower Ugandan suppliers, the Petroleum Authority of Uganda (PAU) has strongly encouraged local firms to embrace joint ventures as a critical pathway to overcome capacity limitations and secure lucrative contracts.

Speaking at a recent supplier development workshop in Hoima, organised by COSL Uganda SMC Limited—a Tier One contractor for both TotalEnergies and CNOOC Uganda, Ms. Vivienne Nabbosa, PAU’s National Content Officer in charge of Contracts, addressed over 60 participating Ugandan entities. She highlighted that insufficient financial muscle and technical expertise continue to hinder local companies from competing effectively in the highly competitive bidding processes.

“Where local suppliers lack either technical or financial capacity, Regulation 9(2) of the Petroleum (Exploration, Development and Production) (National Content) Regulations, 2016 encourages them to form joint ventures in order to effectively participate in the sector,” Ms. Nabbosa explained. These partnerships, she added, can be forged with other Ugandan suppliers who possess the necessary capabilities, or with non-Ugandan companies that can offer vital technical expertise and financial support.

The ultimate goal of these strategic alliances, along with broader national content promotion, is to foster knowledge transfer, build robust local capacity, and ensure maximum Ugandan participation in petroleum activities, aligning with the country’s economic development objectives.

Industry Giants Championing Local Content

The commitment to local empowerment was echoed by leading industry players at the workshop, held under the theme “Enhancing the Capacity of Community Suppliers to Meet Industry Standards.”

Mr. Xia Yu, the General Manager of COSL-Uganda, reiterated his company’s dedication to creating opportunities and fostering economic growth for Ugandan businesses and professionals. He revealed that as of June 2025, COSL Uganda had awarded contracts valued at over USD 93.9 million to 67 Ugandan companies, showcasing a clear commitment to engaging and empowering local enterprises. “In the second half of the year, we aim to further increase the participation of Ugandan firms, with a particular focus on community-based enterprises,” Mr. Xia affirmed.

Beyond contracts, COSL Uganda has also prioritised Knowledge and Technology transfer for Ugandan citizens to cultivate a skilled workforce. Through various annual initiatives, the company has rolled out industry training programs, graduate traineeships, and internships, providing invaluable hands-on experience and exposure to real-world oil and gas operations.

Similarly, Ms. Melidah Mirembe, National Content Coordinator at TotalEnergies E&P Uganda (TEPU), underscored the importance of partnerships in enhancing the capacity of local suppliers. TEPU is proactively implementing its Community Supplier Development Program (CSDP) in the primary project districts of Hoima, Buliisa, Kikuube, Masindi, Pakwach, and Nwoya. The program aims to build on insights from its 2022/2023 pilot phase to strengthen the capability and competitiveness of community suppliers, enabling them to meaningfully participate in opportunities within the oil and gas sector and beyond.

“TEPU is conducting trainings in areas such as HSE management systems, integrated management systems, regulatory compliance, and sustainability practices — all of which are designed to support and benefit community suppliers,” Ms. Mirembe shared.

Bridging the Readiness Gap: A Call for Formalization

Despite these efforts, a baseline assessment conducted by E-360, the firm contracted by TEPU to implement the CSDP, highlighted significant challenges regarding the formalisation of community-based enterprises. Ms. Allen Nzira from E-360 revealed that out of 1,325 community suppliers assessed between December 2023 and January 2024, only a small fraction possessed the necessary formal registrations. A mere 13% were registered with the Uganda Registration Services Bureau (URSB), 14% had Tax Identification Numbers (TINs), 7% were enrolled with the National Social Security Fund (NSSF), and a paltry 3% were listed on the National Supplier Database (NSD).

This data underscores the urgent need for local suppliers to formalise their operations to meet industry standards and access opportunities. The CSDP seeks to enhance the capacity of these suppliers, create platforms for sharing opportunities and market linkages, and engage government agencies to identify synergies that promote sustainability and maximise value. These efforts have already led to the engagement of over 3,000 community suppliers who have supplied TEPU through its Tier 1, 2, and 3 contractors.

Addressing Pricing Concerns: A Balanced Approach

However, the workshop also brought to light a significant concern from some local suppliers: the pricing structures offered by oil and gas contractors. Mr. James Bukoya, General Manager of a local hotel in Hoima City, voiced the sentiment of many. “The prices being offered are not attractive. As you demand high standards, please also be willing to meet our price expectations,” he urged.

This feedback highlights a critical balancing act for the sector: demanding high international standards from local suppliers while ensuring fair and competitive remuneration that allows these businesses to grow sustainably.

The Quarter 2 National Content Development Suppliers Workshop, meticulously organised in accordance with PAU’s National Content regulations, served as a vital platform for dialogue, progress reporting, and identifying areas for further collaboration. As Uganda’s oil and gas sector continues its rapid expansion, the emphasis on joint ventures, capacity building, and open communication will be paramount in ensuring that local businesses truly benefit from this transformative national resource.