Page 4 - AfrOil Week 18 2020

AfrOil COMMENTARY AfrOil
First oil is expected to accelerate the process of job creation in Uganda (Photo: Tullow Oil)
Local content still a priority,
despite crude market meltdown
Equatorial Guinea and Uganda are both trying to prepare local contractors for the next oil boom
WHAT:
Malabo and Kampala want to maximise the economic impact of oil projects.
WHY:
Their plans re ect the fact that their oil elds are at different stages of development.
WHAT NEXT:
Equatorial Guinea is in a better position to take concrete action quickly.
THE oil industry is reeling from a series of knockout blows – the demand destruction prompted by the coronavirus (COVID-19) pandemic, a price war between Saudi Arabia and Russia and inadequate storage capacity for all the extra barrels of crude delivered to the market amidst that price war. It is in a precarious position, and no one is certain yet when prices might recover and supply/demand conditions reach a balance.
In the face of this spectacular bust, it is some- what surprising to see two African countries – Equatorial Guinea and Uganda – preparing for the next boom. is essay will review some of the steps the two states are taking with respect to local content requirements.
Equatorial Guinea
In Equatorial Guinea, the Ministry of Mines and Hydrocarbons (MMH) said earlier this week that its goal was to maximise the role that local contractorsandcompaniesplayintherecovery of the oil sector.
e ministry stated its aim plainly in a press release distributed on May 4 by the African Energy Chamber. It said it would continue working with international oil companies (IOCs) active in the country “to make sure that the recovery of Equatorial Guinea’s oil sector is
made on the back of local content promotion, increased technology transfers and procure- mentofadditionallocalgoodsandservices.”
It added: “A particular emphasis will be put on educating, training and promoting local workforce to help further reduce operational costs for international companies while max- imising the creation of local value and revenue.”
MMH also proclaimed its commitment to “empowering local companies to assist their foreign partners in safeguarding and increasing their operations in the country.” To this end, it indicated that it would continue to encourage domestic rms’ participation in Malabo’s Year of Investment programme.
“[ e] ongoing Year of Investment has gen- erated strong interest from various existing and new players in Equatorial Guinea to build and expand midstream and downstream infrastruc- ture and maximise local processing and trans- formation of domestic crude oil and natural gas,”itsaid.
Uganda
MMH issued its statement just a few days a er
Oil in Uganda, a website owned by Action-
Aid Uganda, commented on the progress
of efforts to to take action on local-content recommendations. 
P4
w w w . N E W S B A S E . c o m Week 18 06•May•2020