Uganda has come a long way since the first oil seepage near Kibiro to now a full-fledged oil drilling program, expected to show its first output in 2025. According to the Petroleum Authority of Uganda (PAU), the Kingfisher oilfield program is a key ”milestone” in the country’s development, and we fully agree.
Per the $10 billion scheme, oil will be drilled from under Lake Albert and transported to international markets through the Tanzanian Indian Ocean port. At its peak, the Kingfisher field will yield 40,000 barrels of crude oil daily.
Anyone who has followed the development trajectory of countries post-oil exploration would know there’s a huge potential for international investors and job creation surrounding the industry. The same is true for Uganda. Let’s explain it in detail.
Potential for Investments in Uganda’s Natural Resource Sector
Oil-dependent economies can either make it or break it, depending on how the oil revenues are managed. Plus, the extent of foreign investment also determines the influx of capital resulting from oil-related programs and drilling schemes.
The post-2025 Uganda can be a completely different picture from the current-day country if foreign investment pours in. Here are some lucrative areas where investors can look forward to making profits.
Transportation Services
Since Uganda is a landlocked country, it is forced to rely on its neighboring country, Tanzania, to reach the ocean for international oil trade. However, the oil has to be transported through the country, from the Kingfisher field to the Indian Ocean port, too.
That’s where railways and other forms of inland transportation come in. The Ugandan government has already granted a production license to the China National Offshore Oil Corporation to develop oil reserves at the Kingfisher field.
Previously, Tullow Oil was the second foreign oil company in the picture. However, in 2020, Tullow sold its stake for $575 million to Total.
The point of this discussion is that the local government is willing to let international players build up the infrastructure and transportation needed for oil-related activities.
Foreign investors can make it a multi-industry opportunity since Uganda also has rich reserves of copper and iron ore. For example, the Kilembe Mines alone are estimated to have 4 million tons of copper, while the sites at Butare and Kamena have over 50 million tons of hematite.
These resources also require an efficient means of transportation. Foreign investors with a stake in transportation services could earn a tidy profit.
Oil Refinery
Investors who want to step into the oil sector don’t have to look far since the Ugandan government itself is searching for investors for the refinery project. The $4 billion refinery project has failed to raise the required financing through US, Italian, South Korean, and Russian private companies so far.
As a result, the Ugandan Ministry of Energy and Mineral Development announced in a press statement that the country is looking for investors to advance the development of the oil refinery.
Investing in the oil refinery will be lucrative for any investor, considering the government backing and constant oil supply. Once complete, the project will produce 60,000 barrels of oil per day.
So, how do you get in touch with the Ugandan Ministry of Energy and Mineral Development about your Ugandan investment plans? Trans African Investments connects you to regulated and licensed professionals in Africa who provide you all sorts of investment services from legal paperwork to getting government incentives.
Automation and Systems Technology
The automation and control systems in the oil and gas industry had a market value of $26.87 billion, and the figure is forecasted to catapult to $41.8 billion by 2030. So, it only makes sense for foreign investors to grab their share in this sector.
A common automation in the industry is SCADA or Supervisory Control and Data Acquisition systems. It helps with the monitoring, controlling, data acquisition, and remote management of processes and machines.
Other possible digital solutions include IoT (Internet of Things) sensors, RPA (Robotic Process Automation), process mining, and workload automation tools. Foreign investors in the digital space can leverage these technologies to reap profits in Uganda’s growing oil industry.
The same technology can also be used in gold, iron ore, and copper mining in the country. For example, IoT can monitor and control mineral processing plants, while RPA can streamline workflows in the administrative departments.
Gold Refining Plant
In 2022, the Ugandan government said that its exploration surveys revealed the country has 31 million tonnes of gold ore deposits. The spokesperson further said that 320,158 tonnes of refined gold can be extracted from the ore, and Uganda is looking to “attract big investors” for the development of the gold sector, which currently has small miners dominance.
Foreign investors can take notes from the Shandong Gold Design Institute of China, which invested in Uganda’s Wagagai Gold Mine and Refinery. The said refinery will start production by March 2024, yielding millions in profit for the investors.
Other investors can follow suit and capitalize on the gold reserves. It’s a great opportunity to make money, as Uganda has not yet developed its gold sector and needs an influx of capital.
Revival of the Kilembe Copper Mine
According to Ugandan geologists, the Kilembe mine holds 4 million tonnes of ore. 1.98% of this ore is copper, while 0.17% is cobalt. Reuters reports that Uganda is “inviting expressions of interest from investors” to revive this copper mine.
In a joint statement, the mining and finance ministries of Uganda said that they have “invited companies” to partner with the government and jointly explore and develop the Kilembe copper mine based on a “mineral production sharing agreement.”
Foreign investors can jump on board and develop the Kilembe site, which has the potential to yield great profits. A company that invests in this project will also contribute to Uganda’s economy by creating job opportunities and facilitating industrialization, as explained by Ugandan ministers.
It’s also important to note that copper prices are at an all-time high, so the potential for profit is groundbreaking. Since copper is used in electric vehicles, and the global EV market is expected to boom, the investment will have a positive long-term impact.
Environmental Services
According to the Ugandan State House, one of the investment opportunities in the oil and gas sector is in environmental services. Most oil exploration activities take place in ecologically sensitive areas, such as the Albertine Graben region.
Sustainability-focused investors can partake in waste disposal, water treatment, and reclamation operations in the industry. Such services help preserve the environment by reducing contamination while yielding profits for the investor. It’s a win-win.
Making Profits Off Uganda’s Natural Resources
Uganda is home to natural resources, from unexploited heaps of gold, salt, cobalt, and iron-ore to rare earth elements, oil, uranium, and vermiculite. On the one hand, these resources have the potential to create jobs and stimulate economic growth.
On the other, they offer investment opportunities for foreign investors, who, as promised by the Ugandan government, will find a ”highly liberalized economy” to operate in. With a minimum capital investment of $100,000, investors can expect a 5% to 7% return.
While it’s well-established that Uganda is a ripe market for foreign investors, there are still some steps one has to take, such as business registration and legal paperwork. At Trans African Investments, we work with licensed and regulated industry experts in Africa through whom you can get licensed professional services to streamline your entry into the Ugandan market. Get in touch with us today to kickstart your project.
