The Principle Petroleum Officer at Uganda Ministry of Energy and Mineral Development Peninah Aheebwa has said that the absence of Super Majors in nations Oil and industry is not a sign of stagnation and ineffectiveness.
Aheebwa was responding to criticism which appeared in the Observer newspaper following the listing of companies registered in the First Licensing Round for Petroleum Exploration, Development and Production of six block in the Albertine graben.
Analysts asserted that the presence of only small and Medium sized industrial players depicted a “one glaring reality” that the nation’s oil sector does not posses the profit potential to attract larger international market players.
However, the technocrat said the Uganda’s oil industry has attracted greater investment opportunities for oil companies across the world and is currently housing one super Major and a series of other Medium sized companies according to the market capitalization thresholds
“Currently, Uganda has a blend of companies which include one major, Total whose market capitalization is just over $110.00billion, one large company, CNOOC whose market capitalization is close to $60.00billion and a small company, Tullow Oil with a market capitalization of about $4.00billion” she reacted.
Aheebwa further noted that among the 17 companies which the Ministry listed for evaluation, two are large companies, five are medium sized companies while the others can be considered to be small companies.
“The licensing round has therefore attracted different sizes of companies which is a desirable phenomenon for the industry especially given the unique advantages of each category of companies” she noted.
She added that in the world oil market, small and medium Exploration and Production companies are known to be good at undertaking exploration especially during the early stage when exploration risk is high.
“They are also more adaptive, collaborative, nimble, focused and innovative” she boosted.
“The aspect of small to mid-sized companies undertaking exploration and subsequently being replaced by large oil companies is an established process in the oil and gas industry worldwide. Aheebwa added.
She also said that the absence of majors in the applicants for Uganda’s first licensing round is therefore not a measure of the success of the round neither does it disadvantage the eminent expansion of the oil and gas sector in the country.