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  • Ministry Moves to Register All Miners

     

    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

    Oil.Uganda@actionaid.org

    http://www.monitor.co.ug/News/National/Ministry-moves-register-all-miners/688334-4665060-13mk0y5/index.html

     

     

  • Uganda Petroleum Institute to get University status

     

    One stone at a time: the first, laid by President Museveni, paves the way for great aspirations

    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.

    Skilling challenges

    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.

    UPIK

    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.

    Projects

    Uganda’s Finance Minister Matia Kasaija who hails from Bunyoro region and represents Buyanja County in the 10th parliament asked the Kingdom to bring to him proposals for development projects.

    “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.

    Preparations

    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

    Oil.Uganda@actionaid.org

     

     

  • Government to dispose-off crude oil

    The Ugandan government plans to dispose-off crude oil stock that was accumulated during the oil exploration and appraisal phase.

    Over 45,211 barrels of oil were reportedly accumulated during the extended well testing in the Albertine graben in Mid-Western Uganda.

    Extended well tests (EWTs) are used to undertake further evaluation of the productivity and characteristics of reservoirs.

    The tests help oil engineers and technicians in understanding the potential of reservoirs to enable better planning and definition of appropriate field development philosophies and production technologies. The exercise thus helps development engineers and production technicians to pilot future facility designs during actual oil field development and eventual production. Extended well testing also helps to obtain additional production-related data, such as water cut, sand production, and well deliverability.

    The oil that was collected during the extended well testing is currently stored in bitutainers at oil well sites of Kasemene 1, Ngara 1 and Ngiri 2, all in Buliisa district. More oil is stored at Tangi Camp area in Nwoya district, Acholi sub-region.

    Some locals in the oil-rich Bunyoro region have been suspicious about oil tankers that have been moving in and out of the Albertine graben. There has been speculation that the tankers could be siphoning oil out of the oil fields. Government and oil firms have repeatedly denied the accusations.

    “Those speculations have been common and Government needs to come out clearly and transparently to explain what those tankers transport,” said Biira Nasser Kiwanuka, the Executive Director of Midwestern region Anti- corruption Coalition (MIRAC), a Bunyoro regional anti- corruption agency.

    Oil in Uganda has learnt that Uganda National Oil Company (UNOC) Ltd is sourcing for companies that can purchase the 45,211 barrels of test crude in the Albertine graben.

    UNOC’s overall function is to handle the State’s commercial interests in the oil and gas sub-sector and ensure that the resource is exploited in a sustainable manner in order enable realization of benefits for the current and future generations.

    UNOC, as per the Petroleum (Exploration, Development and Production) Act and the Petroleum (Refining, Conversion, Transmission and Midstream) Act, both of 2013, is mandated to operate across the petroleum value chain (upstream, midstream and downstream).

    Purchase for test oil up for grabs

    The application process for interested firms in the purchase of the test crude oil is on-going and the deadline is July 10th this year, Oil in Uganda has learnt.

    The applications are being submitted to the office of the UNOC Head of Procurement and logistics which is located at Amber house in Kampala.

    The companies are required to present a crude oil stabilization plan including technology that will be used.

    According to a procurement notice reference number UNOC/Disposal/17-18/001, the companies interested in purchasing the crude should make formal applications to UNOC.

    -“Buyers must demonstrate the provision of suitably insulated and certified containers for transportation of heated test crude oil”, the notice reads in part.

    -The buyers are required to provide the oil spill response plans and all vehicles being fitted with -kits and attachment of contractor personnel who will be trained on how to use them.

    The buyers must have off-loading and feed pumps plus heaters.

    -The buyer must demonstrate Quality, Health, Safety, and Environment (QHSE) management system, procedure/plans for journey management, incident management and spill response, the notice further reads.

    The UNOC Communication Officer, Ms. Angella Kariisa said test crude was initially meant to be burnt through flaring during the well-testing activities.

    “Government decided that is was not good for the environment so the practice of flaring was stopped. We therefore thought it would be in the country’s best interest to sell it and make some money off it”, she said.

    Asked how much money UNOC anticipates to earn from the test crude, Kariisa was non-committal.

    “We are working to get the best price possible”, she said.

    The Buliisa County Member of Parliament, Hon. Stephen Birahwa Mukitale welcomed the disposal of the crude oil.

    “It allays fears and suspicions from people who have been alleging that the oil was already being sold off,” said Hon. Mukitale, whose home is in Kisansya cell, Buliisa Town Council, where Kasemene oil field is located.

    Asked about the feeling of the locals about the sale of the crude, Mukitale said the people he represents do not have any issues with it.

    “It is procedurally right for government to dispose-off public assets that they are not using. That crude was used for study purposes. The purpose has been achieved”, he said.

    He however suggested that such crude could have been used by Ugandan industries as heavy fuel for running heavy duty power generators. He added that the major focus of his constituents who host more than 28 oil wells is the next phase of development and production. They are interested in being aligned with the developments so as to gain more benefits overall.

    By Oil in Uganda Correspondent

    Oil.Uganda@actionaid.org

     

  • Buliisa leaders want audience with President Museveni over oil impacts

     

    Ngwedo sub-county leaders voting on a compensation process for their properties during oil developments

    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.

    Women’s Concerns

    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.

    Oil infrastructure

    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.

    Demands

    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

    OilinUganda@actionaid.org

  • Buliisa residents demand affirmative action on land and property ownership

    Residents of the oil-rich Buliisa district have petitioned Government to implement for them an affirmative action programme intended to protect their land rights.

    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.

    Oil infrastructure

    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.

     Land Rights

    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.

    Government intervention

    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

    The Buliisa RDC Peter Bisoborwa closing the district dialogue(Photo by Buliisa correspondent)

    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 resolutions

    The 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

  • Youth urge government to train them for the oil sector instead of sidelining them

    Communique by GPFOG calling on government to improve national content efforts

  • Museveni urges private sector to train technicians for oil and gas sector

     

    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.

    Edward Ssekika

    OilinUganda@actionaid.org

  • Uganda works to phase out mercury usage

    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.

    Government intervention

    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

    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.

    Financing

    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.

    Technical Specifications

    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.

    Edward Ssekika

    Oil.Uganda@actionaid.org

  • Tullow hopes to conclude a farm-down to Total and CNOOC next year

    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.