UNOC Contract Extensions Cause Internal Friction

A quiet unease has settled over the Uganda National Oil Company (UNOC) following the decision to extend the contracts of top executives until 2031 and beyond. This move has dashed the hopes of mid-level managers who anticipated natural succession and career progression.

UNOC, the state body overseeing Uganda’s burgeoning petroleum industry, is involved in critical upstream projects like Tilenga and Kingfisher, midstream ventures including a stake in the East African Crude Oil Pipeline (EACOP), and downstream activities like the sole importation of refined oil products. The company also holds a significant stake in the proposed Kabaale Refinery and manages the Kabalega Industrial Park.

With commercial oil production on the horizon and several major projects in play, sources indicate that a faction of senior management, supported by some board members, lobbied President Museveni for contract extensions. The rationale presented was the need for “stability” and “specialisation” during this crucial period.

In late January, the President reportedly directed the Ministry of Energy to work with the UNOC board to grant five-year extensions to top executives, including the CEO, Proscovia Nabbanja. While this decision was intended to apply to heads of departments, it inadvertently includes all ten members of the senior management team.

This situation has created a “catch-22” scenario. While there’s a recognized need for robust corporate governance and internal talent development, the current extension prioritizes perceived stability over grooming new leadership. The company’s HR policy stipulate five-year contracts for top management, but the Petroleum (Exploration, Development and Production) Act, 2013, remains silent on UNOC executive tenure, allowing for flexibility but potentially bending HR policies.

Despite a positive outward appearance, frustration simmers among internal staff who feel their advancement has been stalled. The extensions, while perhaps legally permissible by bending internal policies, have cast a shadow over UNOC’s internal dynamics as the nation prepares for its first commercial oil output.

Source: Daily Monitor (Uganda)