Uganda National Oil Company Ltd signed a Memorandum of Understanding (MoU) with China National Offshore Oil Company (CNOOC) to work together to start a partnership in exploration in the Albertine Graben.
The MoU was signed by Dr. Josephine Wapakabulo, the Chief Executive Officer (CEO) UNOC and Fang Zhi, the Chairman of CNOOC International today in Beijing and was witnessed by HE President Yoweri Kaguta Museveni, Hon. Sam Kuteesa, Minister of Foreign Affairs and Mr. William Byaruhanga the Attorney General.
The MoU indicates that UNOC and CNOOC will work together to develop a block in the Albertine Graben and the two entities intend to start the process of accessing the identified block as soon as possible.
The purpose of this cooperation is to ensure that more crude oil is discovered to support the projected production profile of already discovered resources that are under development as well as create an avenue for UNOC to grow its exploration capabilities and begin its journey towards a fully-fledged oil company able to perform operatorship roles.
It is the intention of the two companies to start the process of applying for the identified block in October and start exploration activities as soon as the Ministry of Energy and Mineral Development (MEMD) grants them a license.
It is hoped that the licensing process will not take long and it is planned that the planned activities should start early next year. “UNOC and CNOOC plan to grow their partnership into other operations in and outside of Uganda. UNOC will rely heavily on CNOOC’s experience as a national oil company to grow its capabilities and expertise,” the statement reads in part.
President Yoweri Kaguta Museveni was pleased with the step UNOC and CNOOC were taking in furthering exploration in the Albertine Graben. Dr Josephine Wapakabulo indicated that UNOC is happy to continue building on a very firm and longstanding relationship between the People’s Republic of China and the Republic of Uganda.
She confirmed UNOC’s commitment to ensuring sustainable as well commercial exploitation of Uganda’s Crude oil and gas sector. CNOOC, confirmed their continued commitment to Uganda and working with UNOC to ensure national participation as well as supporting UNOC on its journey to operatorship.
The MoU will be followed by further commercial agreements and it is hoped that these and all relevant approvals will be concluded before end of this year so exploration starts in 2019.
The Ministry of Energy and Mineral Development will biometrically register Uganda’s artisanal and small-scale miners (ASM). This will be in line with a new mineral policy, it says, through its Financial Year 2018/19 policy statement.
This was revealed and launched by the Ministry in mid July 2018. The State minister for Minerals, Mr Peter Lokeris, said the registration is to establish who is involved in artisanal and small-scale mining.
“You know all minerals belong to the government. But there are some people who know how to spot minerals and start mining illegally,” Mr Lokeris said.
He added: “This [biometric registration] is meant to streamline [artisanal and small-scale mining] so that we know who is where.” Mr Lokeris said if the government is not in the know who is involved in artisanal and small-scale mining, some of the ASMs could cross borders; mine or sell the illegally mined minerals and conflict.
Kick off He said the registration is expected to start later this third quarter- in September, although he could not there and then say how much has been budgeted for the exercise. But according to a House Budget Committee May 2018 report, biometric registration of the ASMs will cost $350,000 (about Shs1.3b). Mr Lokeris said the ministry is targeting 1,200 ASMs for a start but would register more and more with time.
Mr George Onega, a small-scale miner in Busia District, Eastern Uganda, said although he had not been aware of government’s plans to biometrically register ASMs, he welcomes it. “I support it, 100 per cent. It is very good because if a miner is operating without being known to the government, it will be hard for the government to get royalties,” Mr Onega said.
Nelson Wesonga, Daily Monitor
Government is in final stages of upgrading Uganda Petroleum Institute Kigumba (UPIK) to a University status.
The revelation was made by the Prime Minister of Uganda Dr Ruhakana Rugunda while representing President Museveni at the 24th coronation anniversary celebrations of the Omukama of Bunyoro Kitara.
Earlier, the Bunyoro Kitara Kingdom Prime Minister Andrew Byakutaga had told the gathering that President Museveni had in April met with the Omukama of Bunyoro at state house in Kampala to deliberate on various development programmes.
He reported that among others, the President agreed that a public university will become operational at Uganda Petroleum Institute Kigumba (UPIK).
Uganda’s Prime Minister who represented President Museveni at the celebrations reaffirmed the President’s promise.
“As Government, we have approved the operationalization of Bunyoro University at Kigumba. Since we have here the minister of Finance, he should expedite a release of the funds when the matter reaches his desk” Rugunda said.
The Uganda Petroleum Institute Kigumba (UPIK) is a Government Tertiary institution that offers petroleum studies.
The institute is located in Kigumba town council in Kiryandongo district.It offers a two year diploma course in petroleum engineering.
According to the UPIK Academic registrar James Bagaya, priority consideration is being given to students who passed science at the Uganda Advanced certificate of Education (UACE). They should have done mathematics, physics, chemistry and technical drawing.
The students must have sat A Level not more than two years ago or having a national certificate in electrical, mechanical or any other Engineering course.
He says the students who have a national certificate from a recognized technical institute will be considered under a certificate entry scheme.
The students should have at least ten points, Bagaya says.
He said the institute recruits 35 students every academic year. The institute has repeatedly received a barrage of criticism of producing graduates that are not employed in Uganda’s mainstream oil and gas industry.
“I have repeatedly asked the Kingdom to bring those proposals to me. Bring them and leave me with a duty to look for funding” he said.
Uganda has over 6.5 billion barrels of crude oil. The Government’s target is to kick off commercial oil production by 2020.
Under the Public finance Act, Cultural institutions are entitled to a 1% share of oil royalties.
Since last year, the Omukama of Bunyoro Kitara Kingdom has been reorganizing his Kingdom. He instituted a seven-man Royal commission headed by Dr Kabagambe Kaliisa, a retired permanent secretary in the Ministry of Energy, and is currently a Presidential advisor on oil and gas.
The commission which he heads, does oversight on all Kingdom activities and it advises the Omukama who heads all clans in Bunyoro.
The discussion on how Bunyoro region can tap in the petroleum industry took centre stage as the Kingdom commemorated the Omukama’s 24th coronation anniversary celebrations.
The oil-rich Kingdom celebrated 24years since Omukama Dr Solomon Gafabusa Iguru 1 ascended to the throne. The Kingdom covers the districts of Hoima, Kibaale, Kagadi, Kakumiro, Buliisa, Kiryandongo and Masindi.
By Hoima Correspondent
Buliisa district leaders resolved to seek audience with President Museveni to share their concerns regarding the oil and gas development impacts in their midst.
They also want to lay strategies of reaping more benefits from the ongoing oil and gas developments.
During a district dialogue engagement held on 20th February 2018 at the district headquarters, the leaders said they have a wide range of concerns over the oil industry which they want to discuss with the head of state.
This followed sharing of numerous issues generated through a series of dialogues undertaken in the sub-counties and town council of Buliisa from throughout the month
The district dialogue was thus a next step engagement that was supported by ActionAid Uganda and organized by Buliisa Initiative for Rural Development Organization (BIRUDO) and Lake Albert Children, Women Advocacy Development Organization (LACWADO) in partnership with Bunyoro Albertine Petroleum Network on Environmental Conservation (BAPENECO) and the civil Society Coalition on Oil and Gas issues (CSCO). The issues shared generated a lot of debate and some recommendations.
Challenges Faced in Buliisa
There are many unresolved problems that were raised by local communities. For example, the Buliisa Sub-county Chairperson, Lt. (Rtd) Kubalirwa Nkuba said many residents have filed cases against oil companies operating in the district but the cases take long to be resolved thereby creating uncertainties.
“This breeds anger and anxiety in the population, he said. Oil cases should be expeditiously handled by a special tribunal or court, he recommended.
Mr. Julius Manyireki, a District Councilor representing people with disabilities said since oil was discovered in the district, several meetings have been held between locals and oil companies but despite this, issues raised remain persistent.
The leaders unanimously agreed that matters affecting residents need to be brought to the attention of the President and seek his intervention sooner than later before conflicts on the ground get worse.
The leaders decried the increasing cases of land grabbing, difficulty by locals to secure jobs and contracts in oil companies as well as irregularities in the process of compensating people whose land and properties are affected by oil and gas infrastructural projects.
“We need a comprehensive skilling programme supported by Government and oil companies because our people need skills to join the oil industry,” said Isaac Nkuba, the Chairperson of Buliisa District NGO Forum.
He shared that there is limited involvement and participation of local communities in decision making on matters regarding people’s livelihoods in relation to petroleum developments.
He emphasized that, “the people are being left behind only to face impacts like poor compensation, lack of information, and threat to livelihood options among others”.
He argued that many people feel alienated and this can easily result in confusion and conflicts thereby creating friction between the people and the oil developments.
Regarding capacity building of local youth, he proposed the need for a deliberate Government programme of equipping existing schools in the district with equipment and science teachers who deserve a hard to stay allowance in order to motivate them to work comfortably in the district.
Ms. Magdalena Namutebi, the Biiso Sub-county Councilor proposed a gender sensitive approach in handling oil matters.
“The women have been sidelined. We need affirmative action,” she said. She called for an increased number of scholarships in oil courses to be awarded to girls and women to get entrepreneurship skills to enable them compete in oil businesses.
Jane Akugizibwe concurred with Namutebi about the skilling approach.
“Let us lobby oil companies and Government to set up a vocational training institute for women.Oil companies should also provide loans to women at low interest rates because many women are failing to pay back loans in commercial banks that have high interest rates,” Akugizibwe emphasised.
The district will host one of the two oil Central Processing facilities (CPF) and infield pipelines that will evacuate crude oil from various oil fields located in the park and within the communities into the CPF. The feeder pipeline will also move from Buliisa district to Kabaale Parish in Hoima district where Government plans to set up a holding terminal for crude oil and an oil refinery among other infrastructure. Crude oil for export will be fed into an East African crude oil export pipeline which was launched in November, 2017 by President Museveni of Uganda and his Tanzanian counterpart President John Pombe Magufuli.
The Buliisa District Chairperson, Hon. Agaba Simon Kinene said leaders and project affected persons need Government support to visit oil producing countries for learning and sharing experiences. “We should position ourselves to tap the dollars that will accrue from the oil and gas production” he said.
This can only happen if we get more exposed to how oil and gas undertakings operate and how local communities can be strategically linked to the same to enable them gain better benefits, he added.
He asked oil companies and NGOs to regularly hold engagements with various stakeholders in the district for information sharing as well as creation of platforms for discussing issues openly thereby enabling consensus building.
He pointed out that Buliisa district is highly impoverished despite being the host of huge oil resources. He thus requested that livelihood improvement programmes in the district need to be enhanced in order to improve the welfare of people affected by oil developments. This, according to him, will be very helpful in addressing many challenges that the people are facing and will enable management of their expectations overall.
The District Chairman greatly appreciated the support by ActionAid for the dialogues that were organized from the Lower Local governments and linked the discussions with the Higher Local Government (district level).
“I thank ActionAid for partnering with Government in a positive way”, said the Buliisa Resident District Commissioner Mr. Peter Bisoborwa.
He pointed out that there are many escalating land conflicts in the district and urged the people to revive their traditional justice system of resolving conflicts amicably instead of always rushing to court where challenges of case backlog and adjournments affect expeditious access to justice.
While commenting on the proposal by leaders to meet the President, he advised that the District Council should sit with Members of parliament who hail from the district and make a joint write up which he will forward to the President’s office for further action.
“Give me your resolution with reasons why you need to meet His Excellency and I will forward it” he said.
He encouraged all participants to remain vigilant and play their part in ensuring that the oil and gas project is protected. He also pointed out that the government is committed to ensuring peaceful resolution of issues and that it is important for the people to maintain the peace in order for development to happen in Buliisa.
Oil in Uganda correspondent, Bunyoro and Didas Muhumuza
The President hints on the possibility of hiring technicians from neighbouring countries, in case Ugandans are not ready.
Government will not hesitate to hire or import oil and gas technicians from neighbouring oil producing countries, in case Ugandans are not ready, President Yoweri Museveni has said.
“Nothing will delay us. If we don’t have skilled Ugandans, we shall hire skilled labour from neighbouring oil producing countries,” the President emphasized.
Ugandan plans to start oil production in 2020, though it is unlikely. Museveni was speaking at the closure of a two-day Skilling and Local Content Forum for the Oil and Gas sector at Sheraton Hotel, Kampala on Tuesday, January 23rd, 2018. The forum was organized by the Uganda Chamber of Mines and Petroleum (UCMP) and the Ministry of Education and Sports.
The oil and gas sector is a specialized sector that requires internationally certified skills especially for engineers and technicians. Skills development for oil and gas, remains critical if Ugandans are going to participate in the sector.
“They [technicians from neighbouring oil producing countries] will be here in the first years of oil production and leave when we have trained enough of our own,” Museveni said.
In 2014, the joint venture oil partners – Tullow, Cnooc and Total released the Industrial Baseline Survey (IBS) report, titled, “A survey to foster opportunities for Ugandans in the Oil and Gas sector”, which revealed the country’s manpower need for the sector alone. According to the report, the sector is expected to generate at least 14,000 direct jobs and more than 100,000 induced jobs during the production and development phase. According to the same report, more than 60 percent of the jobs will be technicians and craftsmen like wielders and metal fabricators among others. However, these will require to be retrained, retooled and internationally certified in order to meet the stringent industry standards.
Government started the Uganda Petroleum Institute Kigumba (UPIK) purposely to churn out such technicians for the sector, but the numbers are too low. Museveni therefore urged the private sector to set up technical and vocational institutions to train the much needed technicians for the oil and gas sector. Government alone, he acknowledged cannot do much.
“My appeal is that Ugandans should set up private vocational and technical institutions and train welders and other technicians. The government is also training technicians but the private sector should play greater roles and get international certification for the technicians,” Museveni added. He said in case students can’t pay for themselves in private technical institutions, government will step in and offer scholarships.
Speaking at the same forum, Loy Abaine Muhwezi, the Assistant Commissioner, Technical Education in the Ministry of Education and Coordinator Skills Development, said government with support from the World Bank is to offer at least 600 scholarships mainly to students in the oil-rich Albertine graben to train as technicians.
Uganda expects to utilize its oil and gas resources to trigger economic growth and development. However, in case, labour is imported from elsewhere, it will leave Ugandans out of the sector, a move that could spell doom not only for the sector but the entire country at large. It means the benefit will not go to Ugandans but rather foreigners.
Dr Elly Karuhanga, the Chairman Uganda Chamber of Mines and Petroleum (UCMP), said that by the end of the 2018, the country might have to come to a Final Investment Decision (FID).
“Once that is done, we shall embark on the development phase that will see construction of the refinery, crude oil pipeline and other infrastructures, creating a lot of technical jobs. So, let us prepare to do the work.” Hon. Karuhanga said.
He denies knowledge of eviction plan by his army!
Mr Museveni expressed this last week ( Friday 8/09/2017) while meeting the leaders of Mubende at the State Logde in Nakayima, Mubende. The meeting comprised of the area Members of Parliament, Residential District Commissioners, District Internal Security Officer, Regional Police Commander, District Police Commander LC111s and LCVs.
When asked his whereabouts at the time of evictions by his army men, President Museveni defended self, saying his intervention was overtaken by events.
“I had wanted to come and talk to these artisanal miners but there was a misunderstanding when Members of Parliament requested me to first talk to the miners and at the same time the army officers that had been put on standby went ahead with the operation, evicted the artisanal miners and they were also denied the chance of taking their property which was not right and un necessary,” Mr Museveni said.
Here he promised to ensure that miners are compensated, although he admitted that it may be difficult and may take time but allowed miners to return to work.
This same message, the President re-echoed during the radio talk show on Point FM in Mubende on Friday.
Mr. Museveni added that; “Earlier on during the Presidential campaigns, I informed the artisanal miners that they can continue with mining activities if they do not stand in the way of large scale investors that are helping us find the real gold deposits but later on, I was informed by the members of parliament that the artisanal miners operating in this area have invaded the land offered to the investor and are antoginising his work, contrary to the contract,” he said.
He further explained that he has no problem with artisanal miners that were operating in this area; “we only needed to re-organise the mining sector by having the local artisans doing proper mining activities.”
Mr. Museveni added that; “Uganda is endowed with very many minerals that we need to handle with care, we cannot allow the illegal mining activities to be carried out which might lead to extinction of these treasures yet with few people benefiting. We all need to benefit from the minerals as a country.”
Meeting with ASMs
The President told Hon. Semeo Nsubuga, MP Kasanda South to organize the miners for a meeting with the President to streamline how the miners will work.
Speaking to Oil in Uganda; The secretary Singo Artisan Miners’ Association Mr Emmanuel Kibirige confirmed that they were contacted by Hon. Nsubuga to prepare to meet the President.
“We are ready to meet the President; we want him to understand how organized we are and how ready we are to work with investors so that all of us benefit from the Mining sector,” Mr Kibirige said.
Kibirige indicated that they have always been organized in associations and have always shown the willingness to work with the investor-AUC mining which currently holds the exploration license for this area-207.8Sqkm and a mining lease of 66sq.km which has been running for the last 23years.
The President has shown willingness to support the ASMs, with a planned visit to the mines slated for 21st October to mend fences. There is thus assurance that the miners may return to work but in a more formal way, more organized manner.
Last month there was a Presidential directive to evict over 50,000 miners from Mubende gold mining area on grounds that the people in the mines are not registered, government doesn’t know the amount of gold getting out from this area, the people operating in this area are not Ugandans and increased environmental degradation which is a threat to the nearby communities.
Many of who were evicted had no relocation plans hence were left helpless and homeless. During the evictions, property worth billions of shillings were destroyed.
However the former Permanent Secretary under Ministry of Energy and Mineral Development Dr.Stephen. Isabalija in the letter dated 02/9/2017 entitled ‘statement on illegal mining activities in Uganda’ explained that government was putting in place intervention for all the local artisans to be registered in all mining areas of Kitumbi and Bukuya sub counties so that they can be organized into groups that shall ultimately be regulated. This process he said would take three months.
ActionAid Uganda is equally working out a plan to support the miners to sue the Government for losses that ensued during the evictions an d the impromptu evictions without respecting the grace period that had been granted to the miners.
Josephine Nabaale and Flavia Nalubega
The muddled procurement of the lead developer for the oil refinery could have played a role
President Yoweri Museveni on Wednesday, in a surprise twist of events, fired the Permanent Secretary, Ministry of Energy and Mineral Development, Dr Stephen Isabalija. Though the President did not give reasons for the surprise sucking, analysts within the Ministry of Energy and Mineral Development argue that the messy handling of the procurement process for the oil refinery lead developer could have played a hand in Isabalija’s sacking.
Mr Isabalija was only 10 months old into the job, after replacing the long serving Fred Kabagambe Kaliisa during a reshuffle of Permanent Secretaries in November last year. Kabagambe Kaliisa is now a Senior Presidential Advisor on Oil and Gas.
The President appointed Robert Kasande, the acting director, Petroleum Directorate in the Ministry of Energy and Mineral Development, as the acting Permanent Secretary. Mr Kasende, a geologist by profession, was also the project manager for the oil refinery project.
Isabalija’s sacking that started as a rumor on Wednesday, was later on Thursday confirmed by the Executive Director, Uganda Media Center and government spokesman Ofwono Opondo who twitted, “Dr Stephen Isabalija’s contract has been terminated and he is to be paid one month in lieu of notice,” Opondo said.
He said the President did not give any reason for the terminating Isabalija’s contract. During his short stint at the Ministry, Isabalija’s oversaw the eviction of over 60,000 artisanal gold miners in Kitumbi Sub county, Mubende district. Government claims that the artisanal gold miners were illegally mining gold and want an “investor” to take over.
MESSY OIL REFINERY PROCUREMENT
Dr Isabalija an academic and former Vice Chancellor, Victoria University, could have burnt his fingers in the procurement process of the lead developer for the oil refinery.
Early this month, Dr Isabalija announced Albertine Graben Refinery Consortium (AGRC), a consortium of American and Italian companies, as the winner for the oil refinery deal. This edged out a Chinese Consortium led by Guangzhou Dong Song Energy Group Limited, that accused the selection panel of corruption.
Guangzhou Dong Song Energy Group Limited, was granted a mining lease to develop the Tororo Phosphates.
The Chinese consortium includes; Guangzhou Dong Song Energy Group Limited, Guangdong Silk Road Fund, China Africa Fund for International Corporation, China Petroleum Engineering and Construction Corporation (CPNC) and the East Design Institute.
After being edged out in the $ 4bn dollars refinery deal, the Chinese penned a letter dated 8, August, 2017, to the Minister of Energy and Mineral Development, Irene Muloni copied to the Prime Minister in which the consortium expressed shock at the announcement.
“We are taken aback by press reports indicating that the government of Uganda has reportedly selected a group known as Albertine Graben Refinery Consortium to develop the refinery project. Incidentally, the same press reports indicate that the Dong Song – CPECC consortium had been appraised as the best bidder with 83.38 percent,” reads the letter signed by LV Weidong, on behalf of Dong Song led consortium.
It added, “The purpose of this letter is to inform you that the Dong Song – CPECC consortium has never disintegrated. It remains strong and committed to invest in the development of Uganda Refinery project provided the concerns raised in the consortium’s earlier letters are addressed. The letter reads.
The consortium even threatened to challenge the procurement process that led to the selection of any other consortium in courts of law. They also complained that the only reason, they were denied a deal is because, the consortium members are close to President Yoweri Museveni.
“Dong Song is suffering because it is close to the President. There is no way it can give money to people involved in the selection process,” an official is reported to have said. This year, two officials from the Ministry of Finance tried to solicit for money from Guangzhou Dong Song Energy Group Limited, the president laid them a trap and they were arrested.
The Chinese also alleged corruption in the way the deal was awarded. “So, we were edged out, because they know we can’t give them money,” an official of the consortium is reported in the local press to have complained.
One of the Consortium members, CPECC, a subsidiary of CNPC has demonstrated capacity having built refineries in South Sudan, Algeria, Chad and Niger. However, selection committee is reported to have edged out Dong Song consortium because they didn’t provide their intended financiers.
The Chinese are also known of using powerfully connected individuals some of them members of the first family to broker their deals. Guangzhou Dong Song Energy Group Limited, used the President to get the Tororo Phosphates Deal. It is this politics of balancing interests, that could have landed Isabalija in trouble and could have had played a role in sacking.
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