The international oil companies licensed to develop Uganda’s oilfields submitted a joint ‘field development plan’ to the government last Thursday, but rapid agreement on the plan is unlikely, given continuing differences over the size of the proposed refinery.
Whilst CNOOC has made no public comment, Tullow and Total representatives say they do not object to a refinery in principle but feel that it should be a modest one, able to process 25,000-30,0000 barrels of crude per day (bpd). That would be enough to supply Uganda with petroleum products. The remaining crude, the companies say, should go in an export pipeline to the East African coast. Read More
Farmers in oil-rich Hoima District were keen to sell produce to the camps accommodating oil workers in the district, but didn’t know how—and for several years the camps sourced their food from Kampala or even overseas. Now, with the camps set to expand as Uganda moves towards oil production, the door has been prised open by Traidlinks, a non-profit organisation backed by some of Ireland’s leading businesses, including Tullow Oil. Chantal Sirisena reports.
HOIMA DISTRICT: “Accessing the new market was difficult,” says Paul Kasaija, a farmer in Hoima. “We were asking ourselves – why can’t we supply [the oil camps]? Why does produce have to come from South Africa and elsewhere?”
WANSEKO VILLAGE, BULIISA DISTRICT: Surrounded by a dozen women and men seated on the bare ground, Mary Nabanja goes through the financial records of her group in a large book, counting each penny of their group savings.
Nabanja is the chairwoman of the Buliisa Women’s Environmental Protection and Savings Group, based in Wanseko village, some 450 kilometres from Kampala.
Those who had not yet paid up bring their balances forward, and the meeting turns to the day’s main agenda—environmental protection.
Richard Kajura, who facilitates the meeting, begins by going through the fauna and flora that their region is proud of—including parks, lakes and rivers and the climate itself. Read More
KABAALE PARISH, HOIMA DISTRICT: Kyapaloni village is deserted. The crowds in the once bustling marketplace are no more. Some homes are shut up, bushes have besieged others, and the gardens are empty of the crops they once boasted.
“The government has told us to begin packing our property and not to grow crops that take more than three months to mature. They said we shall be re-located from this place anytime soon to pave way for the refinery,” says Geoffrey Kiwedde, a Local Councillor II for Kabaale Parish in Buseruka sub-county of Hoima District.
Kiwedde still doesn’t know when he will have to move or when he will receive compensation for the 18 acres of land that he will give up. Read More
Uganda’s former Minister of Finance, Dr. Ezra Suruma, has expressed doubt that the government will have the capacity to appropriately utilise expected oil revenues, given problems of corruption, weak budgertary control and lack of ability to absorb an injection of cash.
“I must say that oil frightens me as a possible source of instability if it is not carefully managed. We have had severe political instability since independence. Some of us who still carry or bear the scars of that instability are careful when looking at these issues to ensure that this instability does not come back,” he told a conference attended by several hundred people including government ministers, Members of Parliament, diplomats, civil servants, industrialists and civil society representatives at the Serena Hotel last Thursday. Read More
Uganda will start producing oil in two years time, while a ‘mini-refinery’ will be operational by 2017 according to the Commissioner of the Petroleum Exploration and Production Department (PEPD), Ernest Rubondo.
“We shall start at low levels of production—three to five thousand barrels of oil per day which will be used for thermal generation. In four years time, we shall have a small refinery of 20,000 barrels per day [bpd], which will be upgraded to 60,000 bpd in five years time, and expanded to 120,000 bpd in eight years time.”
Mr. Rubondo was responding to a passionate plea from the President of Tullow Oil in Uganda, Elly Karuhanga, who said that the oil companies and their partners were increasingly frustrated by the delay in commencement of production. He claimed that some of the service providers who invested heavily, in anticipation of early production, are now nearing bankruptcy. Read More
If you thought Uganda’s fledgling oil industry was all about Tullow, Total and CNOOC, think again. Those companies own rights to explore for and extract the resources, but their operations depend on an army of contractors. Some specialist contractors—such as Halliburton, Baker Hughes, Schlumberger or Saipem—are huge corporations in their own right, with multi-billion dollar annual turnovers. Others are more modest, locally grown enterprises. Contractors do everything from supplying, transporting and operating the drilling rigs, mixing chemical lubricants and sealants to pour down the holes, building pipelines and refineries (if Uganda ever gets round to that), insuring the operations against environmental and/or legal catastrophe . . . right down to laundering the oilmen’s clothes and making their lunches.
Chantal Sirisena and Allan Ssempebwa spent the month of August exploring this wider sector. Recently published, in our OIL PLAYERS|OIL INDUSTRY section, are their results: profiles of 23 oil industry contractors, great and small, headquartered in Milan, London, Houston, Cracow or Kampala, doing business in Uganda. Below, the authors summarise and reflect on their findings.
Last week Dr. Tom Okurut, Director of the National Environment Management Authority (NEMA), admitted in a public meeting that Uganda has failed to carry out a comprehensive environmental and social impact study in the Albertine Graben oil exploration and production area. Oil exploration activities are subject to Environmental Impact Assessments (EIAs) on a case by case basis—with each exploration well, for example, needing an EIA—but no one has yet joined up the dots. And, as Frederick Womakuyu reports below, environmental experts say Uganda’s EIA process is marred by delays, shortage of technical expertise, lack of follow up and the structural incentive for EIA consultants to please the developers who hire them. Read More
International groups and Ugandan civil society activists have expressed disappointment with a long awaited Natural Resources Committee report that was finally tabled in parliament last Thursday.
For the last seven months the committee has held extensive public and private consultations on two petroleum bills to regulate the development of Uganda’s oil industry. The draft bills, prepared by the Ministry of Energy and Mineral Development, were strongly criticised by civic groups for giving too much power to the Minister responsible for oil, with relatively little parliamentary oversight.
The committee’s report, a copy of which Oil in Uganda has seen, does not propose to trim the powers of the Minister, however. It recommends the introduction of several clauses to ensure the involvement of parliament and cabinet in decision making processes, but the minister still remains supreme. Read More
Visiting Ghana, a historic seed-bed of pan-Africanism, Oil in Uganda staff writer, Chris Musiime, found strong support for President Yoweri Museveni’s determination to establish a Ugandan oil refinery, in an effort to break the raw material export mould that has characterised—many would say, trapped—African economies since independence.
Some key figures in Ghana are urging Uganda to set up its own oil refinery, so as to reap maximum benefits from the country’s oil resources—even though Ghana’s own refinery experience has proved costly and contentious.
Hon. Kwabena Appiah-Pinkrah, the Member of Parliament from Akrofuomi in the gold-rich Ashanti Region, points out that for the entire Ugandan population to benefit, there must be value-addition to the crude oil from within Uganda. Read More