Kampala, Uganda | By Michael Wandati | The Uganda National Oil Company (UNOC) has clarified its decision to register a branch in Kenya, emphasizing compliance with regulations related to petroleum product importation.
According to the company’s Head of Corporate Affairs, Sarah Banage, the registration process involved using a certificate of incorporation from Uganda, following standard practices for businesses operating across borders.
“A certificate of incorporation issued in a country of incorporation, in this case Uganda is what is used to register a branch in another country. This is common for businesses operating across countries” said a statement by the Company’s head of Corporate Affairs, Sarah Banage.
Banage explained that the Kenyan branch aligns with the government’s strategy to enhance petroleum product supply security, assigning UNOC the responsibility of sourcing and supplying petroleum to Oil Marketing Companies (OMCs).
This statement comes in response to concerns raised by some legislators, including Emmanuel Otaala, the Chairperson of Parliament’s Natural Resources Committee. Otaala, who represents West Budama South expressed apprehension that individuals from Uganda and a Kenyan might attempt to control the lucrative fuel importation business, conflicting with the government’s intention for UNOC to manage petroleum product imports.
UNOC, wholly owned by the Government of Uganda, manages state participation in petroleum activities across the entire value chain. Established by an Act of Parliament in 2013, UNOC applied for a license in Kenya to directly import fuel but faced rejection from the Energy and Petroleum Regulatory Authority (EPRA). Reports suggest that registering a branch in Kenya was a strategic move by UNOC to meet EPRA’s criteria.
The directors and shareholders of UNOC’s Kenyan branch 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. Other shareholders listed were Zulaika Mirembe Kasajja, Francis Nuru Twinamatsiko, Francis Wambede Nagimesi, Stella Marie Biwaga, and Emmanuel Katongole.
UNOC’s attempt to import fuel directly to Uganda faced obstacles in Kenya, leading to considerations of alternative routes, potentially through Tanzania. Energy and Mineral Development Minister Ruth Nankabirwa presented the Petroleum Supply (Amendment) Bill, 2023, advocating for UNOC to import petroleum products for the Ugandan market.
The bill aims to reduce reliance on middlemen, with a five-year contract negotiated with Vitol Bahrain E.C., financed by a working capital facility, as part of the strategy to secure the fuel supply chain. President Museveni endorsed the move to eliminate middlemen from Uganda’s fuel importation, emphasizing the country’s substantial annual petroleum product imports.
“Without my knowledge, our wonderful People were buying this huge quantity of petroleum products from middlemen in Kenya. A whole country buying from middlemen in Kenya or anywhere else!! Amazing but true,” said Museveni.
President Museveni said Uganda imports petroleum products of the magnitude of 2.5 billion liters per annum valued at about US$ 2bn.
Following disagreements in Kenya, Uganda is exploring increased fuel imports through Tanzania, as discussed during a recent delegation meeting with Tanzanian President Samia Suluhu Hassan.