Mid term Review Project 0329 regarding The Capacity Building programme for Strengthening the State Petroleum Administration of the upstream petroleum sector in Uganda

The Project
The main objective of the Petroleum Component in the Ministry of Energy Capacity Building programme (2005-2008) is; an efficient state administration of the upstream petroleum sector, capable, in a sustainable manner, of planning, promoting and monitoring oil company investments in petroleum exploration and production, and managing state interests and revenues to the benefit of the economy and people of Uganda. The Petroleum Component is organized in three projects: Project 1: Policy, legal and regulatory framework, Project 2: Capacity building, Project 3: Technical and economical studies. Norway has committed approximately NOK17 mill. specifically to the Petroleum component in the period 2005-2008.

Interesting Findings
The Capacity Building Programme has generally contributed in a successful manner to strengthening the state petroleum administration of the upstream petroleum sector in Uganda. The programme objectives and content has generally been adequate at the present stage of building up a petroleum administrative function within the Uganda state administration. The exploration results give basis for an expectation of important petroleum activities in Uganda. Pilot oil production is expected in 2009.

• Project 1: Important contributions to the preparation of a National Oil and Gas Policy were made. However, the Cabinet's approval of the policy document was delayed with more than a year compared to expectation. The delay was outside the control of the Project but several activities related to developing new legislation were then set on hold awaiting this approval. The preparation of the principles for the new law eventually submitted and approved by the Cabinet, provided good capacity building in preparation for the drafting of the law itself.

• Project 2: The focus on the PEPD to act as programme organizer - and on capacity and competence building at the PEPD - has on the whole been very successful. The institution maintains a high quality level in a wide area of petroleum management issues. However, other parts of the Ugandan civil service charged with upstream petroleum or environmental responsibilities have received less attention from the programme. To facilitate a broader coverage for the programme, it is recommended to involve other institutions more directly in the programme, including the MFPED (Ministry of Finance, planning and Economic Development), MWE (Uganda Ministry of Water and Environment) and NEMA (Uganda National Environment Management Authority).

• Project 3 concerns three studies, whereof one study on gas utilization in Uganda was drafted in 2006 but was discontinued since the present discoveries have shown the presence of oil.

• The contributions of the Norwegian team to the Programme have generally been good. The team consists of highly competent persons, and their contributions appear to have had high quality. The interaction with the PEPD employees has been good, and the coordination amongst the team members also appears to have been satisfactory.

• Environment has so far not been a prominent programme area. The license areas and the petroleum activities take place in nature protective areas on the eastern shore of Lake Albert. This area is a part of a biodiversity hotspot, with the variety of landscapes, eco systems and biological diversity. On this basis, PEPD has initiated a certain co-operation with NEMA and representatives of the Norwegian Directorate for Nature Management has made a visit to the exploration areas and issued their report thereon. However, a broader capacity building effort in the area of environmental challenges in petroleum activities is recommended, in particular with NEMA and Uganda Wildlife Authority, in particular since environmental sustainability is one of the main objectives for assistance under the Norwegian Oil for Development initiative.