During the different dialogues organized across seven sub-counties and one town council, with support from ActionAid Uganda, residents and their leaders decried the increased insecurity over land ownership ever since commercial oil reserves were discovered in the district.
“Many speculators claiming customary land have come to Buliisa district ever since oil was discovered, we need Government protection over our own land” Mr Blasio Mugasa, a former Bunyoro Kitara Kingdom deputy Prime Minister told the meeting at Buliisa town Council.
The Oil Central Processing Unit above (Courtesy photo)
Majority of Buliisa communities have held land communally since time immemorial. However, the oil discovery in the rural district has attracted wealthy individuals who are processing communal land titles into private freehold titles.
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.
Mr Moses Tumusiime, one of the project affected persons in Kasenyi village, Ngwedo sub-county (Buliisa district) the proposed site for the CPF said residents in the area are concerned that even before receiving compensation for their land and other properties, machines conducting studies for the CPF are already working on people’s lands.
“Government should not disrespect our right to own property simply because it wants to achieve its oil projects”, Tumusiime said.
“Whereas government can acquire our land for projects in public interest, we are entitled to prior, adequate and timely compensation as enshrined in the constitution. If oil companies do not respect our rights, we shall seek legal redress” said Gilbert Tibasiima the district youth councilor
Sophia Kabonesa, a resident of Buliisa sub-county believes that oil companies should always negotiate for prices of land with respective land owners so that land for oil projects is acquired on willing buyer, willing seller basis.
An inter-ministerial team led by the lands Minister, Ms Betty Amongi visited Buliisa district in January this year and disclosed that compensation for an acre of land in Kasinyi village will be 3.5 million. In May last year, Government had announced a compensation rate of 2.1 million shillings per acre. The residents in Buliisa rejected the proposed price which they described as inadequate. They demanded 21 million shillings per acre, then.
During dialogue engagements, residents in Buliisa asked for differing prices of land but majority preferred an acre of land to be acquired for between 10 to 60 million.
The Buliisa District Community Development Officer, Mr. Bernard Barugahara said compensation rates for crops for the 2017/2018 financial year have already been communicated by the Chief Administrative officer (CAO) to the locals.
He said disclosure for entitlements of project affected persons in Kasenyi village had commenced but there are several individuals and families that are already in conflict over land ownership and boundaries in the area.
The dialogue process
Buliisa Initiative for Rural Development Organization (BIRUDO) and Lake Albert Children, Women Advocacy Development Organisation (LACWADO) in partnership with Bunyoro Albertine Petroleum Network on Environmental Conservation (BAPENECO) and the civil Society Coalition on Oil and Gas issues (CSCO), conducted community dialogues in Buliisa district on the policy and practice aspects in the oil and gas sector, under the support of ActionAid Uganda.
The dialogues focused on the implications of the planned commercial oil production developments on people’s land and property ownership among other aspects. The engagements were conducted in sub-counties of Kigwera, Ngwedo, Buliisa, Butiaba, Biiso, Kihungya and Buliisa town council. The dialogues kicked off on 5th and ended on 12th February 2018.
The engagements culminated into district level dialogue where key issues and recommendations generated from the lower local government level were shared with the various stakeholders at the district level for consideration and further escalation.
The participants in the dialogues included subcounty Chairpersons, Sub-county Chiefs, Sub-county Councilors, L.C 1 Chairpersons, Religious Leaders, Members of the Area land committees, Members of the sub-county courts, representatives of Project affected persons, members of the civil society, elders, women, youth, people with disabilities (PWDs), Local government technocrats, political leaders and security officers among others.
The main objective of the dialogues was to discuss on the impacts induced by the oil and gas developments in Buliisa districts in the runner up to the development and production phases.
ActionAid Uganda’s Extractives Governance Coordinator, Mr Didas Muhumuza said the engagements were meant to create a platform for all stakeholders to discuss issues pertaining to the oil and gas developments’ induced impacts that relate to land acquisition, resettlement and social sustainability aspects.
“We are happy that stakeholders shared ideas on how best to engage and cause positive policy and practice changes so that local communities can have their problems addressed in good time” he said.
The outcomes of the sub-county dialogue meetings will be used for advocacy and further engagement with decision makers at district and national level so that the concerns raised are duly addressed.
Unanimous resolutionsThe residents unanimously asked Government to implement for them an action plan of registering their land and safeguarding their rights in the wake of oil and gas developments. They further asked Government and oil firms to disclose to them the land acquisition process, the road map of oil developments, the Resettlement Action Plans, social and environmental impact studies’ reports among other useful aspects. They asked for special dialogue engagements for the youth, women and people with disabilities at parish and sub-county levels to enable them access information about land acquisitions and petroleum developments. Residents demanded that the engagement processes should always be timely and continuous so that they get to know issues in good time. They applauded the dialogues for having enabled them to get to know issues they should have known much earlier but no one did prepare them in good time for the challenges ahead. The residents also asked ActionAid to train them in advocacy skills in the extractives sector and support them in the formation of an elder’s forum that will advise their leaders on handling conflicts and engagements in the oil sector. They further suggested that government does not acquire their land permanently but rather gets leases so that land owners can have an opportunity of reclaiming the land after oil is exhausted. Oil in Uganda correspondent, Buliisa Oil.Uganda@actionaid.org
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.
The maiden Conference of Parties to the Minamata Convention on Mercury took place in Geneva on September 24-29. The Convention is an international legal instrument or Treaty designed to protect human health and the environment from anthropogenic emissions and releases of mercury and mercury compounds. The Convention currently has been signed by 128 countries and ratified by 83 so far.
The Minamata Convention requires the phase out of many products containing mercury, implements restrictions on trade and supply of mercury and establishes a framework to reduce or eliminate emissions and releases of mercury from industrial processes and mining.
Mercury is widely used by artisanal and small scale gold miners, Uganda inclusive. According to the UN, the practice of mercury amalgamation in Artisanal and Small Scale Gold Mining (ASGM) is of particular concern due to the “decentralised distribution of elemental mercury utilized and its widespread handling, thermal conversion and disposal within social settings such as shops, villages, and food production areas.”
The sad bit in Uganda is that because of the state of ASGM, unregulated and illegal, miners have no idea of the dangers of mercury. At high levels, mercury can harm the brain, heart, kidneys, lungs, and immune system of people of all ages. According to studies, high levels of methyl mercury in the bloodstream of unborn babies and young children may harm the developing nervous system, making the child less able to think and learn and potentially reducing their IQ.
During a working visit in Namayingo a miner brazenly said he had handled mercury for over ten years but “nothing was wrong with him and he had never developed any problems.”
Asked how they accessed mercury, a miner in Nsango B village, Budde Sub County in Bugiri district once told a team from Oil in Uganda that they ‘had suppliers’ but was not willing to elucidate. Mercury however is largely smuggled from Tanzania and easily accessible by the miners at just between Sh800 and Sh1000 a gram meaning it is easily accessible.
Mr Erienyu Johnson, the Busia District natural resources officer, displaying a bottle of dirty brown-coloured water, noted how he had fetched a sample from R. Okame in Busitema where miners used mercy nearby. He said locals had complained that the water had been contaminated by the miners.
He said a nongovernmental organisation, Environmental Women in Action for Development (EWAD), ventured into the district to ‘build artisanal miners’ capacity and promote safe mining without using mercury..
Mr Erienyu said though the district leadership is in the process of working out something to manage the use of mercury by artisanal gold miners there are currently no measures in place.
“We currently have a draft ordinance that is to be presented at the next council seating,” he told Oil in Uganda.
National Task Force
At the national level, Uganda, through National Environmental Management Authority, has a task force – Strategic Approach to International Chemicals Management (SAICHEM) – which is the national focal point for the management of use of mercury.
Mr Paul Twebaze, an environmentalist working with Pro-Biodiversity Conservation Uganda (PROBICOU), says the civil society organisation is the national focal point NGO for SAICHEM in Uganda.
Twebaze says PROBICOU is also a member of the National Steering Committee of the Stockholm Convention against Persistent Organic Pollutants (global treaty ratified by the international community lead by UNEP – calls for the elimination and/or phasing out of 12 POPs) in Uganda, activities all coordinated by NEMA.
“We have been a lead NGO doing work on mercury and of course working towards ratification of the Minamata Convention working with the Government of Uganda to speed up the processes of the ratification of the Minamata Convention.
“We got involved in the negotiation processes and are currently working with government on enabling activities,” Twebaze says.
“We are working with the health sector to discourage the use of dental amalgam which contains mercury. Additionally we are also trying to promote the use of mercury-free electronic appliances,” Twebaze says of their manadate.
He says they are also working with all stakeholders in the mining industry to minimize and eventually phase out the use of mercury especially by the artisanal and small scale miners.
Paul says Uganda is being supported by the Secretariat of the Minamata Convention to speed up the process of ratification.
“After Uganda has fully understood and appreciated the situation I am confident it will ratify the Convention,” he says.
East African Crude Oil Pipeline: The Inside Story Details emerge of how the crude oil pipeline will be financed, managed
New details have emerged in the East African Crude Oil Pipeline (EACOP) regarding how it will be financed, run and managed. For starters, Uganda plans to construct a pipeline that will transport its crude oil to the international market through the Tanzanian coastal port of Tanga.
The pipeline, is expected to be completed by the year 2020, when the country is scheduled to start oil production. In fact, Uganda’s President, Yoweri Museveni and his Tanzanian counterpart recently commissioned the construction of the East African Crude Oil Pipeline. The two leaders laid mark stones for the crude oil pipeline in Mutukula, Kyotera district and Kabaale in Hoima district. Total E&P Uganda, a subsidiary of French oil giant, Total S.A, is spearheading the construction of the crude oil pipeline on behalf of the joint venture partners. Adewale Fayemi, the general manager, Total E&P Uganda says discussions are ongoing to discuss on the formalities of how the pipeline will be run. Already, an agreement has been reached that the East African Crude Oil Pipeline (EACOP) will be run and managed by a Special Purpose Vehicle (SPV) – private pipeline company. This means that a private company will be incorporated with joint venture partners – Tullow Uganda, Cnooc Uganda Ltd and Total E&P Uganda, and the governments of Uganda and Tanzania as shareholders in the company.
Uganda’s minister of Energy and Mineral Development, Irene Muloni, says that the National Pipeline Company (U) Ltd – a subsidiary of the Uganda National Oil Company (UNOC) will own shares in the pipeline company (Special Purpose Vehicle), on behalf of the government of Uganda. As of now, the pipeline company (Special Purpose Vehicle) is yet to be incorporated.
“Negotiations are underway for the setup and corporate structure of the proposed company, that will run EACOP”, Samantha Muhwezi, the Legal Advisor EACOP at Total E&P Uganda explains. The pipeline company, will build, own and operate the crude oil pipeline project.
Eng. Muloni said that there is a possibility of bringing on board investors into EACOP in addition to the governments of Uganda, Tanzania and the Joint Venture partners. Once the pipeline company is incorporated, another sticky issue that will have to be ironed out is how the company will meet its tax obligations both in Uganda and Tanzania. However, at the moment there is already commitment to exempt it from tax.
“There will be no pay transit tax, no Value Added Tax, no corporate income tax. The government of Tanzania gave us 20 years depreciation tax holiday, granted us a free corridor where the pipe line passes and promised to buy shares in the pipe line,” President Museveni said, while laying a mark stone for EACOP at Mutukula, Kyotera district.
Another issue under consideration is the financing of the pipeline project. At least $ 3.5 billion dollars is needed to finance EACOP. Accordingly, to preliminary information, the funds will be raised through debt and equity from joint venture partners and national oil companies of Uganda and Tanzania. Already, Total E&P Uganda, Tanzania and Uganda have appointed three companies as financial advisors for the pipeline. A consortium of South African based Standard Bank, Imperial Bank of China (IBC) and Sumitomo Mitsui Banking Corporation Europe Ltd, were recently appointed as the financial transactional advisors for EACOP.
“They are advising us on how to structure the project to enable lenders to be able to finance the project,” Muhwezi said. Sources indicate that IBC is expected to advise CNOOC Uganda Ltd while SMBC will work with Total E&P Uganda, the lead joint venture partner on the crude oil export pipeline. The special purpose vehicle will also charge $12.2 dollars for every barrel of oil that will be transported in the pipeline, making Uganda’s crude oil profitable even at today’s rate of $50 per barrel.
Uganda’ crude oil has low Sulphur content and therefore, waxy and solidifies at room temperature. This requires heating of the pipeline to at least 50 degrees Celsius to make the crude flow. This means it will require a lot of electricity to heat the pipeline. It will have eight main pumping stations and five heating stations.
“We might use solar energy to reduce on the power to heat the pipeline,”. Muhwezi said. Once completed, at 1,445 kilometers, the East African Crude Oil Pipeline, will be the longest electrically – heated pipeline in the world. Uganda will host 296kms of the pipeline, while the remaining 1,149kms will be in Tanzania. In Uganda, the 24-inch diameter, heated pipeline, will go through the districts of Hoima, Kakumiro, Kyankwanzi, Mubende, Gomba, Ssembabule, Lwengo, Rakai. In Tanzania, it will go through eight regions and 24 districts. It will be a buried pipeline, with an estimated 1-2 meters buried underground and planned to have a daily flow rate of 216,000 barrels per day. It will be designed to add volumes of crude from other countries like Tanzania, South Sudan or Democratic Republic of Congo, incase, they want to use it. During construction, EACOP is expected to generate between 10,000 to 15,000 direct jobs and 30,000 temporary jobs at peak.
Tanzania’s President, John Pombe Magufuli recently pledged Tanzania would now buy crude oil from Uganda instead of incurring high expenses of importing from the Arab world. The Hoima-Tanga route was selected because it offered the least cost route for the transportation of crude oil from Uganda to the East African Coast. Muloni says the Front End Engineering Design report for EACOP and environmental social impact assessment (ESIA) studies, expected to be completed next February, will lead to FID in the first quarter of 2018.
Total and CNOOC will each have 44.11 percent stake in Uganda’s Oil reserves
Edward Ssekika Tullow Oil Uganda Limited, a subsidiary of expects to conclude a farm-down with Total E&P Uganda BV and CNOOC by June next year. According to a Trading Update, the company has already submitted the proposed farm-down to government for approval.
In January this year, Tullow announced that it had agreed to farm-down 21.57 percent of its 33.33 percent interests in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total E&P Uganda B.V for a total consideration of $900million. However, the move was opposed by CNOOC Uganda Limited – another joint venture partner.
CNOOC in March resolved to exercise its pre-emption rights, and thus acquire half of the 21.57 percent interest, Tullow had agreed to transfer to Total.
“Tullow’s farm-down in Uganda continues to progress with the signature of the pre-emption documents by the Joint Venture Partners. The Joint Venture Partners have officially notified the Government of Uganda, seeking its approval of the transaction. Tullow now anticipates that the farm-down with Total and CNOOC will be complete in the first half of next year with cash payment on completion and payment of deferred consideration for the pre-completion period being received in 2018,” the trading statement dated 8th November this year, reads.
Total and CNOOC have locked horns on the farm-down with Total seeking to purchase Tullow’s interest alone. The impasse has prompted President Yoweri Museveni to intervene holding talks with both companies on the issue. Before, CNOOC had exercised its preemption rights, Total was likely to consolidate its position as majority shareholder with 54.9 percent stake in Uganda’s oil resources. In the statement, Tullow expects completion of the farm down before the end of June next year. The company is currently working towards Final Investment Decision (FID), in the first half of 2018, with Front End Engineering Design (FEED) and Environmental and Social Impact Assessment (ESIAs) for upstream and pipeline progressing in line with schedule.
The statement also indicates that the joint venture partners are working towards reaching Final Investment Decision (FID) in the first half of 2018 at which point Tullow’s second cash installment from the farm down will be received.
Pre-emption rights means that in case any of the joint venture partners decides to sell its assets or interests in the petroleum sector in Uganda, the other partners have the ‘first’ priority to purchase the assets before a third party can be allowed to do so. However, a joint venture partner can waive its right. Once the farm down is concluded both CNOOC and Total E&P Uganda BV will each have 44.11 percent stake in Uganda’s oil so far discovered oil reserves. According to Tullow, operational activities are continuing as planned. For instance, the company together with joint venture partners is engaged in Front End Engineering Design (FEED) particularly for the Bulisa project as well as Environmental and Social Impact Assessment (ESIAs) for both the Bulisa project and the crude oil pipeline.
Tanzania’s President John Pombe Magufuli wants investors, the governments of Uganda and Tanzania to expedite the construction of the East African Crude Oil Pipeline (EACOP). Magufuli argues that the pipeline should be constructed in the shortest time possible instead of waiting until 2020 to realize first oil.
Government of Uganda expects to start oil production by 2020 after construction of key infrastructures like the pipeline and the refinery. However, Magufuli believes that first oil can be fast tracked.
“Let us move forward. Why should we wait until 2020? The investors are here, we have the money, and we have the experts. Investors know in case we start now, they will get the results immediately, so, why should we wait results until 2020. We need this project now,” he said emphatically.
Construction of 1,445 km crude oil pipeline is scheduled to be completed by 2020. The pipeline project, spearheaded by Total E & P, one of the joint venture oil partners is expected to cost $3.55 billion. Magufuli who is on a three state visit to Uganda was speaking at Mutukula in Kyotera district on Thursday, after laying a cross-border mark-stone for the East African Crude Oil Pipeline (EACOP). He is also expected to lay a mark stone for the EACOP in Kabaale, Hoima on Saturday. “We are ready for the project, we shall be ready, today, tomorrow and we shall always be ready for the project,” Mugufuli explained.
At the same function, the two Presidents also recognized a team of scientists that spearheaded exploration activities leading to the discovery of oil and gas resources. Uganda’s Minister of Energy and Mineral Development Irene Muloni said EACOP will support economic growth in the region.
“As government, we encourage investors to continue supporting national content in the region which is a key factor in our socioeconomic development. We shall put in place the necessary policies, laws and regulations to ensure that our people are trained, acquire employment and entrepreneurship is boosted,” Eng Muloni said.
Government of Uganda will participate in the East African Crude Oil Pipeline (EACOP) project through Uganda National Oil Company (UNOC). “Not only will the project spur infrastructure development for both countries including road network at a port at Tanga, it will also facilitate and boost trade in the region,” Muloni added.
She said that building the pipeline from Kabaale to Tanga is premised on being the least cost, least risky route. The 1,445 kilometer heated pipeline is poised to become the longest heated crude oil pipeline in the world. It will provide access to Uganda’s crude oil to the international market. In August this year, the two leaders laid the first foundation stone in Tanga for the East African Crude Oil Pipeline.
He describes artisanal miners as “a menace” to the mining sector
In a new twist that arguably contradicts government rhetoric on Artisanal and Small Scale Miners (ASMs) in the country, the Director, Directorate of Geological Survey and Mines (DGSM) in the Ministry of Energy and Mineral Development, Edwards Kato, has ordered all illegal artisanal miners to vacate the respective mines.
“Those people [artisanal miners], still joking should style up. Now, I’m not only a director [in the ministry] but also a commander of the Minerals Protection Unit of the Uganda Police Force. So, those illegal artisanal miners still behaving like those in Mubende [who were evicted], they should pack and vacate the mines, otherwise, my police force will them help to pack,” Mr Kato said.
With the Mineral Police, he emphasized the “madness” of artisanal miners will stop. Kato praised the “Chunga Mazingira Operation”, sanctioned by President Yoweri Museveni in which more than 60,000 artisanal gold miners in Bukuya and Kitumbi sub counties in Mubende district were evicted to pave way for an investor to develop the mines.
The eviction left many artisanal gold miners counting loses without any source of livelihood. The artisanal miners have since sued Attorney General [Government] seeking compensation for their property destroyed during the brutal eviction jointly carried out by the army and police.
On August 7th, this year, the Inspector General of Police (IGP), created a unit known as Mineral’s Protection Police, within the police force. Headed by Ms. Keigomba Jesca, the Unit is charged with implementing policies, plans and strategies for effective security of minerals in the country. The unit was formed days after the army and police evicted artisanal miners in Mubende district. Minerals have a direct impact on revenue, immigration, law and order as well as environmental management.
“Artisanal miners have been a big thorn in the mineral’s sector. They are a total menace,” Mr Kato said.
Kato was on Wednesday 4th, October this year speaking at the 6thAnnual Mineral Wealth Conference at Kampala Serena Hotel. Running under the theme “Minerals: Knocking on the door to cause economic transformation in Uganda,” the conference is organized by the Uganda Chamber of Mines and Petroleum in collaboration with the Ministry of Energy and Minerals Development.
According to a report titled, “Understanding Artisanal and Small Scale Mining (ASM) Operations in Uganda,” by African Center for Energy Policy (ACEMP), 2016, there are more than 250,000 Artisanal and Small Scale Miners in Uganda. Eviction of these miners will exacerbate unemployment and impoverishment, especially among the youth and women who work in the mines.
Though most artisanal miners do their work without any license, which is illegal, evicting them from the mines is not a solution. They instead need to be helped to formalize their operations and licensed. Under section 4(1) of the Mining Act, to prospect, explore, mine, retain or dispose of any mineral without a license, any person mining without a license, upon conviction is liable to a pay fine of Shs 500,000= shillings or imprisonment not exceeding one year. In case of a company, the fine is not exceeding Shs 1 million.
However, in a tongue-in-cheek presentation, Mr Kato pledged to organize artisanal miners. “We need to regulate and formalize Artisanal and Small Scale Mines (ASMs), they have become a menace all over. Government shall organize and license artisanal miners and transform their activities into formidable and viable business entities,” he said contradicting himself.
Artisanal Miners have formed associations in a bid to formalize their mining activities. However, government has been reluctant to recognize these associations. For instance, artisanal gold miners in Mubende formed and registered Ssingo Artisanal and Small Scale Miners Association. The association applied for exploration licenses. The Directorate of Geological Survey and Mines (DGSM) didn’t decline to grant artisanal miners a license, but did not even give them feedback. Failure to give feedback contravenes Mining Act, 2003.
“We shall ensure that artisanal mining is a preserve for Uganda citizens and encourage joint ventures for small scale mining operations,” he said.
In a clear contrast and manifestation of lack of coordination, Mr. Alain Goetz, the Chief Executive Officer (CEO) of African Gold Refinery (AGR), seemed to praise artisanal miners for their constant supply of gold to the refinery. He said his company will work closely with artisanal mining communities in Mubende to ensure that artisanal miners maximize their returns, perhaps not aware that they were evicted from the mines.
A CASE FOR KARAMOJA EXPLORATION
Dr Elly Karuhanga, the chairman Uganda Chamber of Mines and Petroleum (UCMP) asked government to earmark $ 20 million dollars for the geophysical Aerial survey of Karamoja. The area was left out due to insecurity then. “Why can’t we as a country mobilize $ 20 million dollars (approximately Shs 70 billion) and explore Karamoja, a basket for our mineral” Hon. Karuhanga said. Geophysical Aerial survey help to determine the minerals available in an area.
On her part, Speaker of Parliament, Rebecca Kadaga pledged to “harass” the Ministry of Finance, Planning and Economic Development to find the money to finance geophysical Aerial survey for Karamoja. “We can’t find $ 20 million dollars? Really, I think this is lack of focus and commitment towards the mining sector,” Kadaga said.
By Edward Ssekika
Muloni Tables Kanywataba Oil Agreement before Parliament signed with Armour
Gov’t earns Shs 1 bn in signature bonus for Kanywataba oil block
Government of Uganda signed a Production Sharing Agreement (PSA), and issued a License for Petroleum Exploration, Development and Production over the Kanywataba Contract Area with Armour Energy Limited (AEL) from Australia. The exploration license was signed on Thursday, September 14 at Amber House in Kampala. Energy Minister, Irene Muloni signed on behalf of government, while Armour Energy Limited was represented by its Chief Executive Officer. The Kanywataba Contract Area is located in Ntoroko district.
Eng. Irene Muloni, Minister of Energy and Mineral Development said, “This is the first Production Sharing Agreement to be signed in line with Section 58 of the Petroleum Exploration, Development and Production Act 2013, the Legal regime under which I announced the First Competitive Licensing Round during February 2015” Muloni said.
She added, “A signature bonus together with research and training fees, and annual acreage rental fees for the first exploration period amounting to US$ 316,000 have been paid to the Uganda Petroleum Fund”.
The Kanywataba exploration license has an acreage of 344 square kilometers for four years split into two periods of two years each. Muloni said, a minimum work program which includes acquisition of seismic data and drilling of at least one well.
Muloni said, the PSA provides for a requirement to train and employ suitably qualified Ugandan citizens has been provided for in addition to payment of annual training fees to government.
“The award was cleared by Cabinet and the Ministries of Finance, Planning and Economic Development together with that of Justice and Constitutional Affairs. The Minister also said that on Friday 8th September 2017, Cabinet approved the award of two licenses in the Ngassa block and that the agreements would also be signed in a few weeks’ time,” Muloni said.
Weighing in on the exploration license, Robert Kasande, the acting Permanent Secretary, Ministry of Energy and Mineral Development, added that one of the major achievements from this licensing round was the development of a state of the art data room which remains open to the industry to view and purchase data, and will also be used for future licensing rounds.
“The Ministry was able to generate $ 2.4 million United States dollars (Approximately Shs 8 billion) from the sale of data to bidders which was paid to the Uganda Petroleum Fund”, he said.
Uganda’s first licensing round covered six blocks with a total acreage of 2,674 Km2 in the Albertine Graben, Uganda’s most prospective sedimentary basin. Out of the nineteen (19) applicants at the Request for Qualification Stage, sixteen proceeded to the Request for Proposal stage and four emerged successful and proceeded to the negotiations stage. This first licensing round was undertaken in line with the National Oil and Gas Policy for Uganda (2008) and in accordance with the Petroleum (Exploration, Development and Production) Act 2013.
The signing of a Production Sharing Agreement and an award of exploration license bring the number of companies in Uganda’s petroleum industry to four – Total, Tullow, Cnooc and now Armour Energy Limited.
PSA tabled before Parliament
Later, in a move to enhance transparency in the oil and gas sector, the minister tabled before Parliament Production Sharing Agreement (PSA) signed between the government of Uganda and Armour Energy Limited – Australian oil company, over Kanywataba oil block in Ntoroko district.
The oil sector unfortunately remains shrouded in secrecy. The previous Production Sharing Agreements between government and oil companies have been under key and lock and neither accessible to Parliament not the public. A court case filed by two journalists Charles Mwanguhya Mpagi and Angelo Izama to have the oil agreements made public didn’t yield any results.
The Minister also tabled before parliament the Intergovernmental Agreement between the government of Uganda and the United Republic of Tanzania on the crude oil pipeline outlining the contents of the agreement.
Under the Petroleum Act, 2012, the Minister of Energy and Mineral Development is mandated to furnish parliament with periodic reports about the oil and gas sector.
After tabling the report, the opposition Chief Whip Ibrahim Semujju Nganda moved a motion that the report be differed for further consideration. “We shouldn’t rush through a report of this significance to the country. It is important that Members of Parliament discuss the report, when the atmosphere is peaceful and conducive for discussion not that of intimidation,” Semujju who is also the Kira Municipality MP said.
On his part, Stephen Birahwa Mukitale (MP Bulisa), dismissed Muloni’s report as lacking. “The report is devoid of figures, it is devoid of the budget, deadlines, how can we talk of oil and even have first oil by 2020 without a budget and deadlines,” he wondered.
He added, “We need a matrix spelling out the role, budget and responsibility of each and every ministry and department in the oil sector, because this is a multi-sectoral sector, if we are to have first oil by 2020,” Mukitale proposed. Kadaga asked the minister to avail the matrix to the committee.
He said it is wrong for the Minister of Energy and Mineral Development to purport to speak for the Ministries of Water and Environment, Works and Transport and Uganda National Roads Authority (UNRA) and accused the minister of lack of coordination. “There is no road contractor in Bulisa, don’t take us for granted. Other ministries don’t have a budget for oil and gas activities. The president talked about a budget cut of 10 percent from every ministry to finance oil and gas activities, where is that money,” he wondered.
Prof Morris Ogenga Latigo (MP Agago North) wants the previous oil agreement to also be tabled before parliament and MPs allowed access. “I wish the minister could table Production Sharing Agreement for oil blocks where we have already discovered oil,” Ogenga wondered.
Ogenga who is also the chairperson of Acholi Technical Working Group on oil and gas implored fellow lawmakers to read and scrutinize the Kanywataba Production Sharing Agreement warning them that if parliament doesn’t provide oversight for the sector, then the country would be in trouble.
Speaker, Rebecca Kadaga, referred the Minister’s report and the Kanywataba oil agreement to the Committee on Natural Resources to scrutinize the report and report back to parliament. However, no time line was given on when the committee is supposed to report.
About Armour Energy
Armour Energy Limited focuses on the discovery and development of natural gas and associated liquid resources in Australia. Armour Energy Limited was founded in 2009 and is based in Brisbane, Australia. It has 100% interests in the McArthur, South Nicholson, and Georgina Basins covering an area of 33 million acres in the Northern Territory and Queensland; and interests in the onshore Gippsland Basin, Victoria in joint venture with Lakes Oil NL. The company, through its subsidiaries, also holds interests in 7 exploration permits for minerals in Queensland among other oil and gas exploration works.
Got Apwoyo sub county is headquartered somewhere inside a tiny structure in Nwoya district, tucked behind the Gulu – Pakwach highway. Turning off at a trading centre is a small road that leads to the quiet two-roomed establishment.
The trading centre, a product of one of the several Internally Displaced Camps during the wanted warlord, Joseph Kony’s Lord’s Resistance Army insurgency in northern Uganda, is littered with grass thatched structures.
The area is fairly cool, it’s the rainy season. Endless tracts of green vegetation are visible are along the highway. Expansive gardens of cereal are visible too. In the background of the sub county office is expansive maize garden. It looks healthy.
The region, having not been cultivated for a long time during the insurgency, has very fertile soils. In fact there are agro-based companies cultivating on very large scale. But beneath the agricultural potential here, lie simmering emotions and a sense of hopelessness.
Mr Openy Ben Latim, the LC3 chairperson Got Apwoyo sub county, is a very bitter man. Nwoya district lies in the Albertine region which harbours Uganda’s oil fields. Across the highway is the Murchison Falls National Park where Total E&P won production licences for oil and gas in the Exploration Area (EA1).
Despite the proximity, Mr Openy is not optimistic at all and says the people are not happy. During the initial oil exploration in the park while prospecting for hydro carbons, locals and leaders did not know what was going on.
“I don’t think we are going to benefit anything. Youth would come from Kampala to work here when we have our own. They used to bring everything from Kampala. Trucks used to bring vegetables for those people yet here we can grow vegetables,” Openy says in a bitter tone.
The explanation that Nwoya district is part of government’s master plan for the oil sector – the standard gauge railway poised to run through the district, a network of roads in the park, feeder pipelines linking to the Central Processing Facility in Buliisa – does not offer any comfort.
In fact, the mention of Buliisa irks him the more. “You see, everything happens in Nwoya but ends up in Buliisa,” he says.
A story is told of how a group of locals once intercepted a truck that was leaving the park because they believed it was carrying crude oil. The truck was one of several that delivered suppliers then to the camps in the park during the exploration.
At Anaka Sub County not far from Nwoya district headquarters, the sentiments are not any different. Mr Opobo Geoffrey, the LC3 chairperson, said it was absurd that oil companies could not give their people simple jobs like security guards or drivers.
“We do have those certified drivers here but they cannot get jobs there,” he said when asked if some of the locals were certified drivers.
“We do not know anything that is going on there in the park. The only thing we know about Total is the scholarships some of our youth get. I so far have four students benefiting, but that is it,” he said.
The now Pakwach was curved off Nebbi district. Mr Okumu Benson is the LC3 chairperson Pakwach Town Council. He too adds his voice saying they do not have information about the oil activities in the district.
In the compound of the town council offices stands a Total – that now has a production licence for EA1 in Murchison Falls – branded notice board. Also a Total branded ‘suggestion box’ is pinned on the main administration block. Mr Okumu says the oil company occasionally pins up general information about developments in the sector but locals interpret it otherwise.
“They usually find their way to the camps and claim they advertised jobs. We wonder where they get that information but it’s because people are desperate. Sometimes they accuse us of hiding oil jobs from them,” Okumu says.
Mr Aguta Jimmy Frank, the Pakwach town clerk, says because of lack of information has misled people. During the exploration stage there was a wide spread problem of land speculation in the Albertine region because of oil.
“People here sold their land at giveaway prices to speculators. Our people were taken advantage of and now they blame the government,” Mr Aguta says. Expectations remain high now that production phase is upon the country. Chairman Okum says they were told at a workshop in Kampala that 13,000 jobs would be created for Ugandans. But there is a catch.
Not all about oil
“This is the time to seize opportunities in the oil sector,” Paul Tumwebaze of Civil Society Coalition on Oil and Gas once told a youth workshop in Masindi. This is a statement that has countless times resonated at numerous oil and gas workshops, the media and conferences under the flagship of ‘local content’.
Whereas several Ugandans have pinned hopes on oil since prospecting started industry stakeholders advise about the immense opportunities available to feed off the value chain of the sector.
While meeting local government leaders, all of whom have been mentioned above, Didas Muhumuza, the ActionAid Extractives Governance project manager, who has immense knowledge of the sector as well, passed on the same message.
Specifically rallying for the inclusion of youth in accountable governance of the oil and gas sector, he reiterated that the industry will not absorb every Ugandan looking to join the sector.
“The decisions government is taking now as we enter the production phase were informed from what has been gathered since exploration started. There is nothing we can change now, but can work within the existing infrastructure,” Muhumuza told the meeting at Got Apwoyo Sub County.
Chairman Openy had endlessly lamented that Nwoya was being sidelined, wondering why the oil pipeline network that will be draining in the Central Processing Facility should be located in Buliisa. Mr Muhumuza was at pains to explain that because Murchison Falls is a protected area much of the activity could not take place there.
While many of the leaders lamented their youth were not equipped to position themselves for opportunities through skilling and training, there are organisations like the GIZ-funded Skilling Uganda that are offering these opportunities. The programme is targeting to skill 8,000 youth in welding, driving, carpentry, electrical which will be on high demand during the production phase.
ActionAid Uganda under the Extractives Governance is rolling out a two-year Ford Foundation supported intervention to sensitise youth and build their capacity to gain an understanding of the extractives sector and use their knowledge to engage state and corporate actors in the accountable management of the sector. The project focuses on four Albertine districts of Hoima, Buliisa, Nwoya, Nebbi; and Mubende district.
Fortunately some of the leaders are not hopelessly waiting for the magic bullet. Mr Shaban Kinobe. LC3 chairman Panyimur Sub County said everyone is looking at oil whereas opportunities are abound in the value chain. Many of the leaders however expressed optimism about the new project, “People in Power; Influencing People in Power.