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Making Headway: A Conversation with the CEO of Uganda’s National Oil Company

Uganda is what’s known in oil circles as a “new producer” country. Officials must scale a steep industry learning curve, contend with strong interest from international project finance advisors and make tough decisions about their country’s assets vis-à-vis a global shift away from hydrocarbons.

Earlier this month the Executive Course on Oil, Gas and Mining Governance was held at Oxford University, co-hosted by the Blavatnik School of Government and the Natural Resource Governance Institute. There, I caught up with Josephine Wapakabulo, chief executive officer of Uganda National Oil Company (UNOC). Wapakabulo established UNOC two years ago and was its first member of staff. UNOC handles the state’s commercial interest in the oil and gas sector and has a mandate to ensure that hydrocarbon resources are exploited in a sustainable manner. 

Uganda National Oil Company CEO Josephine Wapakabulo. Photo by John Cairns. 

Audrey Gaughran: How are you enjoying the course?

Josephine Wapakabulo: A lot! There are two sides to it: obviously the course itself, which you can see has been well thought-out in terms of the topics it covers; and then the people and the connections that you make and the learning from each other, even my fellow Ugandans, who I’d previously met in Uganda. We’ve had more time to interact and discuss issues and come up with ideas. And then there’s the debate. I really enjoy the open debate, thinking, looking at things in other ways, getting other perspectives on things. That was what I was hoping for and I am definitely getting that.

That’s something Paul [Collier] has been speaking to throughout the course: the importance of different branches of government and different actors within the sector talking to each other and understanding different perspectives. Why do you think that does not happen so much in countries— why are you talking more with Ugandans here in Oxford?

In Uganda, my colleagues and I are dealing with operational issues related to the sector; here we have a chance to think, away from the day-to-day. The conversations are more strategic, more long-term, as opposed to the operational stuff we are dealing with every day, when we are in meetings.

Which sessions have been the most substantively useful for you?

Obviously the one on state-owned enterprises was directly relevant to me. I really had some epiphanies on some of the challenges I face. I really enjoyed the two-country simulation, and role-playing president-for-the-day. Because a lot of what we were doing in that artificial environment were real things I am dealing with on a crossborder pipeline. And it was interesting to have other people in my group saying, “Oh, yes, you’re going through that,” and I could really bring my experience to what was happening but also gain insights on how to deal with things.

Is there anything you will do differently as a result of being on this course; you said you had some epiphanies?

Yes, I really understand and own the fact that I am profit-driven, not to the exclusion of the other functions a state oil company can deliver. But having a framework to filter that through will help me engage some of the stakeholders who are focused on ideas like “UNOC should just be a cash cow,” “UNOC should just be an area where people are trained and learn…”—to understand that we need all those pieces, but [making profit] is my focus. So now I have got an approach that will help me communicate with some of my political stakeholders back home.

When you go back to work, what’s the most immediate thing on your desk?

I just need to get to first oil. And to do that there are so many contractual agreements I need to get through. To get through them I need good advice, advisors: legal, commercial, technical. To get good advisors I need money, and money is a challenge. Before you actually produce I need money for the [extraction] projects, money for supporting infrastructure like roads, but I need money now when I am doing the contracts, for good advisors, so I don’t fall into the pitfalls we’ve identified during the course.

During the course several people raised the issue of investment bankers flooding into newly resource-rich countries to sell finance. What has been your experience with this?

I realized early on there was too many of them so I said, “Hang on,” and I went back to my central bank and the Ministry of Finance and said, “We do need to raise money, and money for advisors is one thing, but [we need] up to USD 1 billion for the projects; how do we do it”? And the good thing is we have now engaged the ministry and the central bank and we have regular meetings on how we are going to raise that money so I am less worried about the money for the projects. I know we will get there because we are working together. I didn’t say [to the bankers], “Oh yeah, great, I’ll sign up with you.” I said, “I am going back to my central bank and my Ministry of Finance to make sure we are aligned,” because any decisions I make will have a huge impact. So I am less worried about being flooded by investment bankers. I know there are enough financial instruments in the world that we can figure out what is best for Uganda; we just need good advisors supporting us. Advisors who do more that than just telling you about international best practice and benchmarks, you need them there in the room as you are negotiating.

Is that now within grasp, to have the right advice in the room?

The advisors are there. There’s lots of good firms. But they come at a premium. That’s why even the big 100-year-old international oil companies pay experts to negotiate for them. So how can I face up? We’re right at the start—I don’t even have oil yet. I need to get good advice to get good contracts so I am maximizing that revenue once it starts.

Do you have concerns about the longer-term changes in the energy mix and how this will intersect with Uganda’s oil industry?

The technology curve in renewable and alternative energy sources is not a straight line—it’s getting exponential. People are getting better at renewables so I worry that when we turn up and say, “Hello, Uganda is here with oil,” everyone else will be, “Yeah, we’re all over here [with renewables].” But for Africa there’s still the uniqueness that our populations are growing and we still have a lot of industrialization to do, so we will probably be dependent on oil longer, but who’s to say how long? Who’s to say that in 10 years someone is not going to crack that nut and find another energy source based on new chemical or newly discovered thing that suddenly makes oil less of a need? But you just don’t know and so we can’t sit back and relax.

Has the course helped you plan for that volatility and possible future obsolescence?

We’ve had a lot of great support from development agencies over the years on a lot of our policy, our legislation, our structuring. But the devil is in the details and the practicalities. Because as much as we have these strategic aspirations, we are still driven by very cyclical and very short-term pressures. Winning that strategic long-term argument is not easy and this course has given me insights on how to better manage some of the challenges ahead.

This interview has been edited for clarity and length.

Audrey Gaughran is the senior director of regional programs at the Natural Resource Governance Institute (NRGI).