A bid for quality in Uganda

Uganda

Tom Joseph Mukasa, CEO of Pearl Engineering Company, talks to The Energy Year about the company’s developments in 2021 and objectives for 2022, as well as the key strengths that have enabled it to consolidate its position in Uganda’s oil and gas sector. Pearl Engineering provides construction and engineering services such as building works and heavy civil engineering/infrastructure works.

What kind of developments did Pearl Engineering see in 2021?
2021 was a slow year for Pearl Engineering. Covid-19 slowed down some of the execution and bidding processes we were undertaking. Therefore not a lot happened, especially outside the oil and gas sector. However, the promise of oil and gas coming up pushed us, even though the delays were problematic. We increased our activity and secured around USD 8 million worth of projects towards the end of the year. We also completed the first batch of relocation replacement houses for the Tilenga-affected families.
In 2022, we are happy to leverage some tenders that we have won for the Tilenga Project – for example, from TotalEnergies and Mota-Engil subcontracts, alongside other local players. These works include enabling civil works for well and drill pads and access roads, as well as general construction in the exploration areas 1 and 2 at Tilenga, including the A1 and C1 roads.

What are your key objectives for 2022?
In 2022, we are bidding for various projects, including some work for the Tier 1 Contractors (McDermott and Sinopec) and some contracts related to maintenance activities. We are also looking at some packages for the EACOP [East African Crude Oil Pipeline]. Work valued at close to USD 40 million is available for execution and will soon be awarded, ensuring some work for the coming three years.

Tell us about the key strengths that have enabled Pearl Engineering to consolidate its position in the oil and gas sector.
High quality is a necessary condition in the oil and gas sector alongside upholding the highest health, safety and environmental protection standards. Pearl Engineering has been ISO certified for a long time, and we have had a relationship with oil and gas companies for some time now. We have worked with Heritage Oil, Tullow Oil and Total E&P since back in the day, establishing a good working relationship with them. In return, they have supported us as one of their local content partners.
It is also a challenge in terms of the preparatory work involved. For example, we do not have all the material testing equipment in the field, and therefore some material components have to be transported back to Kampala for analysis. It is also a challenge to extend operations on such a large scale.
Our workforce has increased in the past year, and therefore training, especially HSE training, is more critical than ever. We plan to build a training centre in Kampala to devote more space to training and centralising these activities.
Training touches upon local content commitments as well. It is important to hire from the communities.
Bank conditions are not very attractive for us in Uganda. Their rates are not favourable for the competitive margins in the construction industry, and not having enough long-term contracts hinders our ability to use capital at an economical cost. These are some of the reasons we look for partners and investors: it is vital to find the resources and funds to invest in more machinery and hire and train a quality workforce.

How have the past 60 years since independence shaped Uganda?
When I was a kid, times were definitely worse than today. Uganda has achieved enduring peace, bringing stability, which is crucial for economic growth. To be secure and stable, with businesses knowing that the rule of law and private property are protected – has created the necessary conditions for progress and stability in this country.

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