The Uganda National Oil Company (UNOC) has issued a statement explaining the rationale behind registering a branch in neighboring Kenya. According to Sarah Banage, the Head of Corporate Affairs at UNOC, the move aligns with regulations governing the importation of petroleum products, a common practice for businesses operating across borders.
In response to concerns raised by legislators, Banage emphasized that the Kenyan branch is part of the government’s strategic decision. UNOC has been mandated to enhance the security of petroleum product supply by sourcing and supplying to Oil Marketing Companies (OMCs).
Parliament’s Natural Resources Committee Chairperson, Emmanuel Otaala, expressed apprehension that individuals might exploit the fuel importation business. Otaala emphasized the government’s intention for UNOC to take over petroleum product importation.
Established by the Petroleum (Exploration, Development and Production) Act, 2013, UNOC, wholly owned by the Government of Uganda, manages state participation in the petroleum value chain. Major shareholders are the Minister of Energy and Mineral Development (51%) and the Minister of Finance, Planning, and Economic Development (49%).
Contrary to reports in the Kenyan press, UNOC’s directors and shareholders include Irene Pauline Bateebe, the current Permanent Secretary at the Ministry of Energy, and Malachi Omolloh Adedeh, a Kenyan lawyer and CEO of Liroja Services.
Licensing Challenges in Kenya
UNOC had applied for a license to directly import fuel into Kenya but faced rejection from the Energy and Petroleum Regulatory Authority (EPRA). Sources suggest that the registration of the Kenyan branch is a step towards meeting EPRA’s criteria.
Energy and Mineral Development Minister, Ruth Nankabiriwa, confirmed the government’s decision for UNOC to source and supply petroleum products to licensed Oil Marketing Companies in Uganda. A proposed bill aims to mandate UNOC to import petroleum products for the Ugandan market.
President Museveni endorsed a five-year contract between UNOC and Vitol Bahrain E.C. to finance the petroleum importation business. The move aims to eliminate middlemen from the fuel supply chain and reduce the annual $2 billion importation cost.
Shift to Tanzania
Amid disagreements in Kenya, Uganda may explore importing more fuel through Tanzania. Minister Nankabirwa led a delegation to Tanzania to discuss the proposed policy for bulk importation and supply of petroleum products, emphasizing potential benefits to President Samia Suluhu Hassan.