To Stop Or To Support Eacop

In recent times, most especially after the signing of the Final Investment Decision (FID) in February this year, government agencies and personalities intensified efforts to promote, protect and make a case for Uganda's premier oil and gas infrastructure project, the East African Crude Pipeline. 

A campaign codenamed Support EACOP was rolled out to counter Stop EACOP, a campaign which over the years has been traded by Civil Society Organizations (CSOs) that look at the $3.5bn Pipeline as a climate change facilitator by potentially emitting over 34 million tons of CO2 emissions every single year. 

According to revised plans, the Pipeline construction is scheduled to start in 2023 and be ready in 2025 when Uganda will realize First Oil.

The 1444km pipeline will carry crude oil from Hoima in western Uganda to the Tanzanian port of Tanga where it will be shipped to the international market. The EACOP project developers are TotalEnergies (62%), the Ugandan and Tanzanian governments (15% each) and China National Offshore Oil Corporation (8%). 

The pipeline, which will be the longest electrically-heated crude oil pipeline in the world, will transport 216,000 barrels of crude oil per day from the Tilenga and Kingfisher oil fields. Apart from carrying the Ugandan waxy black gold and the subsequent revenue, it will give Uganda, the Pipeline development will create hundreds of jobs and offer numerous business opportunities to Ugandans and Tanzanians. 

The snaking infrastructure, like the ongoing Support EACOP & Stop EACOP debate, has positive and negative sides. 

FIGHTING TO ‘STOP’ & ‘SUPPORT’ EACOP

The government and the International Oil Companies (IOCs) had for the long haul ignored the anti-fossil fuels campaigners to go on with the EACOP smear campaign until now. The environmentalists, local and international organizations and individuals called on the government to abandon the multibillion-dollar project. 

On seeing that the government was not yielding, they turned their focus on the potential financiers of the Pipeline like banks and insurance companies. And indeed they managed to get some American and European banks to back off and indicate that they cannot fund the project because of the risks it poses to the environment and its contribution to climate change. Financial institutions like JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, Deutsche Bank and others have ruled out any financing role. Insurance heavyweights Munich Re, Allianz, Axa and Beazley will not provide any cover. TotalEnergies has not come out to address this matter but their operations in Uganda have remained steady. 

In an interview with Daily Monitor, Mr. Peter Muliisa, the Uganda National Oil Company (UNOC) Chief Legal and Corporate Affairs Officer said they have 'entities from Europe, from Asia and all over the world willing to finance EACOP. He told the newspaper that they will be able to announce the chosen financiers in July. According to the Center for International Environment Law, Japanese Sumitomo Mitsui Banking Corporation (SMBC) is acting as financial advisor to TotalEnergies in a deal that will see a yet-to-be-named Japanese bank bankroll the transboundary project. TotalEnergies by proximity to CNOOC is also said to be considering going to China in search of a capable financier.

POPULAR GLOBAL ENERGY TRANSITION MOVEMENT 

The global conversation regarding the energy transition that will see the world move on from fossil fuels to clean energy put projects like the EACOP in a difficult position and developing countries like Uganda set to adversely be affected by this transition are putting up a fight. 

These poor countries want to extract oil and gas at any cost. And with the financial backing of international companies, as we are seeing in Uganda, the developing countries will proceed to harvest the hydrocarbons as they keenly observe the clean green energy game so that they don’t miss out on anything. 

In Uganda, there is the political will for the country to extract the hydrocarbons from the ground, refine them for the domestic market and export the rest to the international market which is the part where the EACOP comes in. 

But to achieve this, Uganda has to deal with local CSOs that have the backing and influence of their counterparts from the West. They want Uganda to abort its mission of extracting its oil and join the energy transition trend swaying into the renewable and green energy side.  

The anti-EACOP campaigners in Uganda led by Africa Institute for Energy Governance (AFIEGO), a CSO leading 13 others on his cause, argues that the EACOP project poses immense social, economic, environmental, and biodiversity and climate change risks. The CSOs alert that these risks are set to, directly and indirectly, affect forests, national parks, game reserves, lakes, rivers, wetlands and others in Uganda and Tanzania.

BIODIVERSITY RISKS RAISED

AFIEGO, quoting a 2017 World Wildlife Fund (WWF) report reveals that the EACOP will affect 2,000km of protected areas and will fragment habitats for elephants, chimpanzees and other endangered animals in protected areas like Bugoma, Wambabya and Taala forests in Uganda as well as Minziro Nature Forest Reserve and Burigi-Biharamulo Game Reserve in Tanzania.

It is also believed that the EACOP is set to affect wetlands belonging to Lake Victoria, Lake Tanganyika as well as the Wami/Ruvu and Pagani basins. Other wetland systems that are likely to be impacted include the Sango Bay-Musambwa Island, Nabajjuzi and Lake Nabugabo, Mabamba Bay, Lutembe bay and others.

The conservationists say that the pipeline poses a great risk to the rich biodiversity – the forests, game reserves, lakes, wetlands and other protected areas which are habitats for internationally-recognized endangered species. Bugoma forest in Uganda hosts over 600 chimpanzees or 12% of Uganda’s chimpanzee population; the wetland systems are important bird areas for both migratory and other bird species.

Some of the social impacts include the possibility of EACOP affecting a total of 13,000 households in Uganda and Tanzania. These households are losing land, houses, homes and a way of life. 

As they waited for compensation, the Project Affected Persons were stopped from using their land to grow perennial food and cash crops leading to food scarcity, reduced family incomes, psychosocial distress, school drop-outs, and abuse of their cultural rights and others. 

In the long-term, community and public expenditure on health, climate change crises and others could increase because of the EACOP. Air pollution, oil spills and others will worsen community health.

ALL IS WELL – GOVERNMENT, OIL COMPANIES SAY

Despite all these fears being raised by the CSOs, the EACOP project, like the other oil projects will go ahead as planned with the full blessings of the government including well-received approvals from the National Environment Management Authority which supervises and certifies all Environmental and Social Impact Assessment (ESIA) conducted before any project commences. The EACOP, after a rigorous ESIA exercise, was okayed by NEMA and will proceed. Internally, the IOCs, TotalEnergies and CNOOC Uganda, base their and international based. 

TotalEnergies recently launched the Tilenga Biodiversity Program, an initiative aimed at protecting and conserving biodiversity in and around the Tilenga project area. This gesture has been looked at as evidence and commitment from TotalEnergies indicating that prioritizing nature was top of the company’s agenda.

Mr. Philippe Groueix, the General Manager of TotalEnergies, said they are mindful of the sensitive context within which they are undertaking their activities. "We have thus committed to ensuring that we implement action plans designed to produce a net positive impact on biodiversity. The biodiversity program will ensure a sustainable approach in working with the community towards protecting and conserving the ecologically rich area.”

Speaking at the 3rd National Local Content Conference Ms. Pauline Macronald, the Environment & Biodiversity Manager at TotalEnergies said the company strives to manage the environmental effects of all its projects & operations according to the Mitigation Hierarchy principles of avoidance, minimization, restoration & offsetting. 

To enhance Biodiversity & Ecosystem Services, Ms. Macronald, revealed that TotalEnergies has partnered with NEMA, National Forestry Authority, Ministry of Water, ECOTRUST, Uganda Wildlife, Petroleum Authority and Wildlife Conservation Society to ensure a positive impact on wildlife & communities. 

Mr. John B. Habumugisha the Deputy Managing Director of EACOP Limited, a company that was formed to do business, discussing Environment and Social Governance elaborated that as a company, they continue to insist that anything they do around EACOP must be stringently compliant to the environmental and Social requirements. "In terms of the environment, we have avoided most of the sensitive areas & the design levels are stringent. Our system ensures that we don't have issues of spillage," said Mr. Habumugisha.

The Petroleum Authority of Uganda, the industry regulator, has fully backed the project saying that IOCs have done the necessary due diligence to ensure the safe production and transportation of oil through EACOP. Dr Joseph Kobusheshe the Director HSE at Petroleum Authority explained that Environment and Social Governance has become an important measure of sustainability.

THE WORLD, ESPECIALLY AFRICA, STILL NEEDS OIL & GAS  

The emergence of the pumped-up Support EACOP agenda knocking out Stop EACOP with verve reignited a public debate on what is the right thing to do. This debate also came at a time when the war in Eastern Europe between Ukraine and Russia was causing a scarcity of crude oil and sky-rocketing fuel prices globally. 

The war and the subsequent sanctions by the EU and partners on Russia created a scarcity of Natural Liquefied Gas. These scarcities and the outcry that resulted somehow underscored the fact that fossil fuels still drive the day-to-day lives of people across the world and that the world cannot afford to live without them. 

In a highly publicized article, President Yoweri Museveni May this year described efforts by developed countries to impose a moratorium on fossil fuel investment across the world as 'misguided'. President Museveni explained that due to the highly increasing population in Uganda, renewables cannot 'deliver the base load required to boost manufacturing or industrialize agriculture -- crucial for Africa in the wake of the pandemic.'

"In light of the Ukraine war, the West, too, would do well to consider a policy change -- and initiatives like the Lake Albert basin oil project may form part of the answer. By investing in oil and gas deposits in friendly nations such as Uganda, Europe could decrease its reliance on hostile nations." President Museveni penned. 

President Museveni's argument is shared by many industry players on the African continent. They argue that with Africa's socioeconomic development hinging on the exploitation of the continent's oil and gas resources, this ‘hypocrisy’ by already developed countries in the West could spell a travesty for Africa.

Mr. Leoncio Amada Nze, the president of the African Energy Chamber questions 'how is it that Africa must decarbonize while Europe continues to industrialize.' He says: “We deserve to develop our oil and gas to make energy poverty history. In 2022, Africa needs to ramp up its licensing rounds, drive exploration and position itself as the primary supplier for domestic and global markets." With over 600 million people without access to electricity, Africa cannot and should not leave its oil and gas resources in the ground, he adds. 

 

DR Congo Entry Into EAC Good For Uganda Oil & Gas Sector

By Dr. Abel Tindao

The Democratic Republic of the Congo (DRC) has joined the East Africa Community (EAC) at a critical time for Uganda and its quest to become an oil and gas producer. Uganda and partners - Tanzania, TotalEnergies, CNOOC Uganda and others – in February announced the Final Investment Decision (FID) that will see international oil companies invest about $15bn in the Albertine Graben, western Uganda.

Uganda, with 6.2bn barrels of yet to be extracted crude oil (1.7bn said to be recoverable) shares a political boundary with DRC. Already, endowed with various minerals like gold, diamond and other, DRC, according to a 2012 seismic survey, suspects to have about 3bn barrels in the blocks around the Lake Albert basin. This basin is shared by both countries.

It is important to note that while Uganda and DRC are politically friendly, the continued instability in East DRC, including harbouring Ugandan rebels is detrimental to regional peace, doing business, development and social welfare. But now that DRC has joined the EAC, there is hope that the bloc can as a group pacify that part of DRC.

Existing collaboration between Uganda & DRC

Late last year, Uganda and DRC collaborated to help Uganda People’s Defense Forces (UPDF) flush out Allied Defense Forces (ADF) rebels out of their hideouts inside DRC using what has been called Operation Shuja. The ADF, backed by terrorism groups like Al Shabaab and Al Qaeda, had bombed two separate targets in Uganda’s capital Kampala. This collaboration is an indication that more collaborations can be achieved more so if they are economic.

In December of 2021 it was reported that Uganda had started building 223km of roads in the DRC at a cost estimated to be USD330m to improve trade in the two countries.

In 2020, DRC exported $17.7M to Uganda. The main products that DRC exported to Uganda are Raw Tobacco ($4.65M), Scrap Iron ($3.73M), and Sawn Wood ($3.15M). In the last 25 years the exports of DRC to Uganda have increased at an annualized rate of 16.1%, from $421, 000 in 1995 to $17.7M in 2020.

In 2020, Uganda exported $265M to DRC. The main products that Uganda exported to DRC were Cement ($40.6M), Palm Oil ($24.2M), and Rice ($12.2M). In the last 25 years the exports of Uganda to DRC have increased at an annualized rate of 8.03%, from $38.4M in 1995 to $265M in 2020.

With these number as provided by the Observatory of Economic Complexity (OEC), an online data visualization and distribution platform, Uganda stands to benefit from this arrange by exporting more to the DRC< a country with a population of 90 million people.

The two above collaboration show to what extent the two countries eying economic transformation can go. And now that they are endowed with rich natural resources, there is so much they can achieve if they focus on being good neighbors, promote peace, economic recovery and pan Africanism.

Untapped potential waiting

Of the entire Albertine Graben endowed with huge potential of hydrocarbons, Uganda has explored only 40 percent and will in the next 25 years when the confirmed recoverable oil is expected to be depleted, Uganda will have earned a humongous USD50bn. But that is anything to be worried about. Already Oranto Petroleum and Armour Energy have been licensed to do exploration in that area.

Also, the Ministry of Energy and Mineral Development (MEMD) has sent out expression of interest for oil and gas exploration. Uganda National Oil Company (UNOC) is teaming up China National Offshore Oil Corporation (CNOOC Uganda) to venture into that. This is an indication of how rich the Albertine Graben is and the prospects for Uganda continue to look good.

The DRC is already an oil producing country, positioned number 12 in Africa, depending largely on its coastal production activities in the western part of the country. But Sub Sahara’s largest country has huge untapped potential on borders of Uganda.

TotalEnergies, the oil company commandeering the development and eventual production of Uganda’s oil is said ‘to be chasing for business in DRC’ with a mission to tap into their resources. The oil company and Uganda & DRC can harmonize their interests and come up with a formula that will see the natural resources exploited and benefit the citizens.

Protecting the environment, rich biodiversity

Of course this has to be done sustainably since it is in an eco-sensitive area rich in biodiversity. You wouldn’t want to extract the hydrocarbon at the expense of the environment. That would be disastrous and irresponsible. Already, Civil Society Organisations (CSO) have sounded worries that fossil fuels is putting the environment in Lake Albert basin at risk and fueling climate change.

To avert such fears, Uganda has a good National Oil Gas Policy whose mission is to create everlasting value from the resources and law regimes that are protective of not only revenues that will be accrued from the oil and gas production but also the environment. DRC can bench on what Uganda has achieved, and of course, Uganda can offer what it has learnt so far.

Tightening security & ensuring peace

In the jungles of eastern DRC, proximately next to Uganda, there over 133 rebel or militia groups funded by the illicit minerals trade. These militias are a menace and if not dealt with can curtail the proper and sustainable exploitation of these natural resources.

We have seen this happen in Nigeria’s Delta where militia bomb and set oil pipelines ablaze. Uganda and DRC need to find a domestic solution to this because, like we have seen, even with the presence of United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO), a UN peacekeeping force hasn’t stopped these militias from causing havoc.

Sometimes Lake Albert has seen Ugandan fishermen attacked by armed civilians or DRC soldiers and robbed clean while on the lake in Ugandan waters. This continues to happen even when the Ugandan government protested to their counterpart in Kinshasa. This cannot continue especially when exploration for oil is ongoing on the lake. Gun wielding bandits are a risk to manpower undertaking exploration. Oil companies wouldn’t want to invest and risk the lives of their workers like that.

It is therefore important that the two countries work out a solution and give investors and oil companies a guarantee that they are safe. Investor confidence is earned.

The writer is a Ugandan marine security expert.

Oil & Gas Sector Spurring Demand For Goats In Bunyoro

Statistics indicate that currently Uganda has 14.1 Million goats and World over their Population stands at 1.4 billion goats.

In order the country to satisfy the local and international, the country need to produce 40 Million goats per year.

Dr. Jean Simon Onyaiti, the Academic Consultant from Bishop Stuart University, explains that quarter wanted a sample of 10,000 goats per month but the country couldn’t meet the demand.

According to Dr. Onyaiti, the demand is high but they cannot meet that requirement. He has called on government to invest more in goats especially on government farms.

Dr. Sylvester Baguma, the Director Bulindi Zonal Agriculture Research Institute (BUZARDI), says in Bunyoro Sub-Region they have about 800,000 goats. The ratio, he said, is still bad.

Dr. Charles Kajura, the Hoima District Production and Marketing Officer, explains that they expect the demand to increase more once the oil production begins and Hoima International Airport starts operation next year.

Dr. Hanington Byarugaba, a goat farmer and the owner of City Farm, has advised fellow farmers to get actively in goat rearing.

Other famers say that they have benefited a lot from the business and goats are easy to manage.

OIL & GAS: Kikuube Farmers Embrace Cooperatives

The Kikuube district farmers are embracing cooperatives as one of the ways to benefit from the oil and gas opportunities in the region. 

More than 50 members of Bugambe Parish Grain Producers Cooperative Society Limited have registered a cooperatives.

They are looking at adding value to maize and then supply it to the market created by the emerging oil and gas industry in the district. 

The Kikuube district Resident District Commissioner (RDC) Amlan Tumusiime while officiating at the launch of Bugambe Parish Grain Producers Cooperative Society encouraged the farmers to formalize their business and add value to their farm produce. 

Like Tumusiime, Peter Banura, the Kikuube district LC 5 chairperson, advised the farmers to concentrate on value addition and boost their household income.  

Julius Busiinge, the chairperson of Bugambe Parish Grain Producers Cooperative Society Limited says that the purpose of upgrading from an association to a cooperative is to be able to collectively fight poverty. 

 

PATRICK POUYANNÉ: We Are Fully Aware Of Social & Environmental Challenges Uganda Oil Projects Present

The Chairman and Chief Executive Officer (CEO) of TotalEnergies, Patrick Pouyanné, has promised that the lead joint venture partner in the development and eventual production of Uganda's oil and gas resources will use the Lake Albert Development Project as an exemplary project in terms of shared prosperity and sustainable development.

The Lake Albert Development Project has come under scrutiny from Civil Society Organizations who argue that the project possess risks to the environment and the social wellbeing of host communities not only in Uganda and Tanzania but also in DR Congo.

But Pouyanné is quelling these fears saying that TotalEnergies is committed to implementing action plans that will have a net positive impact on biodiversity as part of the implementation of these projects.

“We are fully aware of the important social and environmental challenges it represents. We will pay particular attention to use local skills, to develop them through training programs, to boost the local industrial sector in order to maximize the positive local return of this project," said Patrick Pouyanné, chairman and CEO of TotalEnergies.

He added: "With today's signing of a framework agreement on renewable energy, we are laying the foundation to implement our multi-energy strategy in Uganda and contribute to people's access to energy."

TotalEnergies maintains that this oil development is in line with TotalEnergies' strategy of only approving new projects if they are low-cost and low emissions.

In particular, the design of the facilities incorporates several measures to limit greenhouse gas emissions well below 20 kg CO2eq/boe, including the extraction of Liquefied Petroleum Gas for use in regional markets as a substitute for burning biomass, and the solarization of the EACOP pipeline.

On 1st February, 2022 TotalEnergies and the energy ministry signed a MoU for the development of renewable energy with the objectives of developing 1GW of installed capacity, promoting access to electricity and clean energy, supporting national climate change objectives through the deployment of carbon footprint reduction projects.

Earlier, that day Uganda’s President Yoweri Museveni, the Vice-President of Tanzania, Patrick Pouyanné, representatives of China National Offshore Oil Corporation, Uganda National Oil Company and the Tanzania Petroleum Development Corporation announced the final investment decision for the the Lake Albert Development Project.

The Lake Albert Development Project encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline (EACOP) in Uganda and Tanzania.

The Tilenga project, operated by TotalEnergies, and the Kingfisher project, operated by CNOOC, are expected to start producing in 2025 and to reach a cumulative plateau production of 230,000 barrels per day.

The upstream partners are TotalEnergies (56.67%), CNOOC (28.33%) and UNOC (15%).

Production from the oil fields in Uganda will be transported to the port of Tanga in Tanzania through the EACOP cross-border pipeline, whose shareholders are TotalEnergies (62%), UNOC (15%), TPDC (15%) and CNOOC (8%).

TotalEnergies says that all partners are committed to implementing these projects in an exemplary manner, taking into consideration the environmental and biodiversity stakes, as well as the rights of the concerned communities, in accordance with the stringent performance standards of the International Finance Corporation (IFC).  

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