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.

Bunyoro Women Decry Seclusion From Oil & Gas Activities

By Busiinge George

Women from the oil-rich sub-counties of Buseruka and Kabaale in Hoima district are still oblivious of activities and opportunities accruing from the discovery of oil in the Albertine Graben.

Uganda discovered approximately 6.5 billion barrels of commercially viable oil deposits in the Albertine Graben raising expectations for the industry to boost competitiveness among homegrown investors and stimulate inclusive development.

Years later, the government embarked on a programme for the development of crucial infrastructural projects in preparation for the production of oil. The crucial projects include the construction of the oil refinery in Kabale-Buseruka, the East African Crude Oil Pipeline Project and Hoima International Airport.

Indigenous entrepreneurs were also registered on the National Oil and Gas database as a precursor for them to benefit from the USD 20 billion (74 trillion Shillings) funding that the World Bank sunk in the development of infrastructure projects.

But several women have expressed ignorance of activities taking place in the Oil and Gas sector and demanded initiatives that are specifically designed to empower women and enable them to participate in the development of the sector. Many say that they have not been informed or even empowered to tap into opportunities.

Eveline Nyangoma, a resident of Buseruka trading centre questions why all training held over the years was targeting men, disregarding the potential and ability of women to contribute to the growth of the sector.

Annet Kobusinge, another resident observes a need for the government to engage women in the Albertine Graben and empower them with the required vocational skills to work in the sector.

Racheal Katusabe, a resident of Kabaale trading centre says that even the few training and workshops conducted in Hoima town targeted urban dwellers living out the population in rural areas, which comprises mainly women.

She says there is still a need for massive sensitization on how best women can learn and know more about available opportunities in the oil and gas sector.

Stella Buwala also a resident of Kabaale says that although women are eager to work in the oil and gas sector, they do not have information about the sector calling on the government to fully engage and empower local women in the Albertine on what they can do to benefit from the sector.

Buseruka Sub County Chairperson Ali Tinkamanyire acknowledges that most rural women have not been prepared to tap into the opportunities and calls for collective efforts between the government leaders and the oil companies to sensitize women on the available opportunities in the sector.

Hoima District Chairperson Kadir Kirungi says that leaders have severally advised the women to form groups so that they can be easily supported to supply goods and services, but most of them have adamantly declined yet they cannot supply the oil sector individually. He says that much is needed to change the mindset of the rural women.

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