The Benefits of Foreign Capital in Project Financing of Uganda's Oil and Gas Sector

Inhaltsangabe oder Einleitung

The main purpose of this study is to carry out a critical analysis of the benefits of foreign capital in Project Financing in Uganda’s oil and gas sector.

Efforts to find oil in Uganda started as far back as the 1980s. However, the initial efforts were not successful in establishing commercially viable deposits in the country. Renewed and consistent exploration efforts commenced in 1980 which culminated into confirmation of commercially viable oil in 2006 . The companies currently licensed to explore, develop and produce petroleum in Uganda are; China National Offshore Oil Corporation Uganda Limited (CNOOC), Total and Total E& P. All these are aimed at facilitating investments in the oil and gas sector.

These company had to seek foreign capital to facilitate the major projects of oil exploration and development and to ensure a steady cash flow of funds to cater for the projects through project financing. This is very critical for the success of any project undertaken by the parties. Most developing countries looking for capital and the only way how they can finance their projects is through project financing in which they receive the continuous flow of cash for the life of the project after guaranteeing the bankability of the project through risk mitigation and other forms of security.