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  • Peter Lokeris

    Ministry of Energy launches Biometric Registration of ASMs in Uganda

    A landmark event in the mining sector of Uganda as the country positions extractives industries as the engine for social and economic development saw the launch of the biometric registration of artisanal miners’ project on 29th March 2019. The project is geared towards formalizing and regulating the activities of ASMs in the country to realise and actualize their developmental role in the sector as Uganda works towards achieving her development agenda as enshrined in the Vision 2040. Speaking at the launch, Hon. Peter Lokeris, State Minister for Minerals Development noted that government recognizes the development role of the ASM sub-sector, which must be well organized to realize its full potential. Engineer Vincent Kedi, the Acting Commissioner for Geological Survey and Mines, hailed the different Civil Society Organizations that are working with the sector to make it better. He hailed ActionAid Uganda for coming on board to work with government to harness the potential of the sector through supporting vital efforts like today’s event and those aimed at organizing ASMs in Uganda. Mr. Don Biniyina, Executive Director of Africa Centre for Energy and Mineral Policy, which was contracted by government to implement BRASM, noted that the event was a special one for artisanal and small-scale miners as it has come as a result of protracted negotiations with government through the ministry to formalize ASMs that have for long been referred to as illegal. He noted that it also marks an important day for ACEMP as the implementers of the project. Mr. Didas Muhumuza, the Coordinator for Extractives Governance work at Action Aid Uganda, that supported the launch of the event but also mobilized ASMs from different regions to attend, reiterated that just as AAU’s mission is to support marginalized communities to fight social injustices, the organization is committed to continually support the artisanal and small-scale miners in their struggles and work together with government to harness the potential of the ASM sub-sector. He also pointed out that AAU champions the domestication of the African Mining Vision (AMV), which was assented to by Heads of States and Governments under the African Union in 2009. The AMV provides for among other key aspects the formalization of ASMs and protection of their rights and livelihoods. The launch of BRASM by MEMD was supported by ACEMP (as the implementer of the project) in partnership with ActionAid International Uganda(AAIU).

  • Tullow-Oil-Logo-279x210

    Museveni, Tullow boss make a deal on Capital Gains Tax

    Tullow is set to sell a substantial part of its assets in Uganda to Total E&P Uganda and CNOOC Uganda – a farm-down that attracts capital gains tax.

    President Yoweri Museveni and the Chief Executive Officer (CEO) of Tullow Oil plc have agreed a deal that will enable oil company enjoy a phased payment of capital gains tax accruing from the sale of part of its assets in the Albertine graben. Tullow Uganda Ltd –a subsidiary of Tullow Oil plc in January 2017 announced the sale of a substantial part of its assets in Uganda to Total E&P Uganda and CNOOC Uganda Ltd in a farm-down that attracts capital gains tax.

    According to Tullow Oil plc’s full year statement, the Chief Executive Officer of Tullow Oil plc, Mr Paul McDade and President Yoweri Museveni met on January 19th, 2019 in which the issue of capital gains tax from the sale of part of the company’s assets in Uganda was discussed. The 30-page company full year results report was released on February 13th, 2019. The meeting was also attended by the CEO of Total S.A. In the meeting, Tullow Oil agreed the principles for Capital Gains Tax on its $900 million (approximately Shs 3.3 trillion) farm-down to CNOOC Uganda and Total E&P Uganda. Cabinet gave Tullow Oil’s farm-down to Total E&P Uganda and CNOOC Uganda a green light. “Following meetings in January 2019 between the CEOs of both Tullow Plc and Total S.A, and President Museveni of Uganda, the government and the Joint Venture Partners are now engaged in discussions to finalise an agreement reflecting this tax treatment that will enable completion of the farm-down to take place,” the financial statement reads in part.

    The report adds, “Any Capital Gains Tax is expected to be phased and partly linked to project progress. At completion of the farm-down, Tullow anticipates receiving a cash payment of $100 million and a payment of the working capital completion adjustment and deferred consideration for the pre-completion period of $108 million.”

    A further $50 million of cash consideration will be made and is anticipated to be received when the Final Investment Decision is taken on the development project, possibly mid this year or thereabout. The deal is meant to avoid a possible dispute between government and Tullow Oil over the payment of the capital gains tax. In 2012, Tullow Oil was embroiled in a dispute with the tax body – Uganda Revenue Authority over payment of capital gains tax following the farm-out by former Heritage Oil Uganda in favour of Tullow Oil Uganda, which led to protracted litigation. Uganda came out as the victor and the payment was effected accordingly.

    Final Investment Decision (FID) The report also notes a delay by Joint Venture Partners to reach a Final Investment Decision (FID). “The joint venture partners – Tullow Oil Uganda, Total E&P Uganda and CNOOC Uganda continue to work towards reaching FID for the development project around mid-2019,” the report reads in part.

    Mark MacFarlane, the Executive Vice President of Tullow Oil for East Africa noted in the report, “This year the East Africa team will be driving hard towards two Final Investment Decisions on our East African projects which have the potential to deliver over 50,000 barrels of oil per day of net production to Tullow by the early 2020s,” he said. Mark MacFarlane emphasised that Tullow’s East Africa team is making good progress on delivering the potential the projects offer. Edward Ssekika Edited by Flavia Nalubega Edited by Didas Muhumuza Oil.Uganda@actionaid.org

  • Oil and Gas Summit

    Tilenga Project: Government to conduct public oil hearings

    Government has accepted to hold two public hearings over the Environmental and Social Impact Assessment (ESIA) report for the Tilenga oil project.

    The public is hereby notified that the Petroleum Authority of Uganda (PAU) has been requested by the National Environment Management Authority (NEMA) to hold public hearings for the Environmental and Social impact Assessment report for the proposed Tilenga project, a statement released by PAU last evening reads in part.

    The name Tilenga is derived from two local names for the Uganda Kob (Antelope) which is called “Til” in Acholi and “Engabi” in Runyoro-Rutoro.

    NEMA received the ESIA from Total E&P Uganda and Tullow Uganda operations Pty Ltd for the proposed Tilenga project.

    Under the Tilenga project, the Government through its licensed oil companies has discovered commercially viable oil deposits north of Victoria Nile in Murchison falls national park and south of Victoria Nile in Buliisa district.

    The project includes jobi-Rii, Gunya, Ngiri, Kasemene, wahrindi, Nsoga, Kigogole oil fields. In 2016, Government granted petroleum production licenses to Total Exploration and Production Uganda B.V (TEPU) and Tullow Uganda operations Pty Ltd (TUOP) to develop and operate upstream petroleum facilities in the Albertine graben. Oil Licenses

    TEPU was granted production licenses for Ngiri, Jobi-Rii, Gunya fields while TUOP was granted production licenses in Mputa,Nzizi,Waraga, Kasemene, Wahrindi, Kigogole-Ngara,Nsoga and Ngege fields.

    The development of six fields namely Ngiri, Jobi-Rii, Gunya, Kigogole and Kasemene-Wahrindi within Buliisa and Nwoya districts will form part of the Tilenga project.

    The Tilenga project will be funded by TEPU, TUOP, CNOOC Uganda Ltd and Uganda National Oil Company.

    Composition According to the project documents which oil in Uganda has seen, the Tilenga project is composed of well pads, a central processing facility and other associated facilities, production and injection network of pipelines and cables, Bugungu airstrip, Tangi operation camp, a water abstraction system, victoria Nile crossing, river Nile pipe crossing and some roads.

    The project also includes temporary construction camps, construction support base, a logistical check point in Masindi and borrow pits. NEMA’s notice

    Oil in Uganda reported this week how the National Environment Management Authority (NEMA) is seeking public comments on ESIA for the Tilenga project.

    A public hearing will be a forum in which relevant stakeholders and developers will be brought together to express opinions and offer suggestions on the proposed project to influence the decision making process during the ESIA approval.

    The hearings will be held in accordance with regulation 22 of the National Environment impact Assessment regulations 1998, the statement added.

    A public notice released by the NEMA Executive director Dr Tom Okurut informed the public that the outcomes of the public review will contribute towards making a final decision of the project in accordance with the Environment impact assessment regulations.

    The notice asked members of the public to submit their comments by November 9th 2018.

    Concern of CSOs However, 13 CSOs demanded for public hearings over the project.

    “It is through public hearings that oil host and affected communities, the poor, marginalised and illiterate will be able to make comments on the ESIA to enable NEMA make a decision based on the collective input of all concerned stakeholders” the CSOs said in a joint letter to the NEMA executive Director Dr Tom Okurut.

    The CSOs said they are concerned that in the notice, NEMA did not indicate that it will call for public hearings before making any decision on the ESIA.

    The concerns of the CSOs are contained in a letter dated October 17, 2018 which was submitted to NEMA by the AFIEGO Chief Executive Director Dickens Kamugisha on behalf of the CSOs.

    The Environmental Impact Assessment (EIA) Regulations of 1998 mandate NEMA to call for a public hearing where there is controversy or where a project has trans boundary impacts, the CSOs argued.

    “We need public hearings to ensure effective public consultations that can build consensus not only among Ugandan stakeholders but also stakeholders across the borders who are likely to be affected by the Tilenga project” said Kamugisha, a lawyer. Hearings

    Gloria Ssebikari, a senior communication officer at the the Petroleum Authority of Uganda (PAU), PAU will conduct two public hearings this month.

    “The public is further notified that there will be two public hearings held on 12th November 2018 at Buliisa district headquarters and on 15th November 2018 at Gotapwoyo primary school, Gptapwoyo subcounty, Nwoya district from 9am to 5 pm” the notice reads in part.

    The notice indicated that public comments should be addressed to the presiding officer at PAU.

    Local communities fear that oil developments in an ecologically fragile area in Murchison falls national park and around the Nile delta could potentially affect the environment. The national park is one of Uganda’s leading tourism destinations and it hosts thousands of wild endangered species of animals, birds, insects and reptiles.

    River Nile waters are shared by Uganda, Rwanda, Sudan, Tanzania, Burundi, South Sudan, Ethiopia, Kenya, Egypt and DRC.

    The CSOs have asked government to establish a multi-stakeholder committee comprised of actors from government, the private sector, religious and cultural groups, CSOs, the academia and others to act as an independent multidisciplinary oversight body to promote compliance with environmental conservation tools such as EIA, SEA, ESIA.

    The CSOs have further asked NEMA to delay any decision to issue a certificate of approval for the Tilenga ESIA until the new environmental laws and regulations are put in place by government and parliament. This will help the country to stop engaging in oil activities based on a weak and outdated environmental legal framework, the petition added.

    The CSOS that petitioned include the Africa institute for Energy Governance (AFIEGO), National Association of Professional Environmentalists (NAPE), Environmental Conservation Trust of Uganda (ECOTRUST), Guild Presidents Forum on Oil Governance (GPFOG), Center for Constitutional Governance (CCG), South Western Center for Policy and Advocacy (SOWIPA), World Voices Uganda (WVU), Community Transformation Foundation Network (COTFONE), Greater, Green Organisation Africa (GOA)-Masindi, Oil Refinery Residents Association (ORRA)-Hoima, Kakindo Orphans Care-Buliisa, Girl Power foundation-Kasese, Friends of Nature-Kasese.

    Fears of Environmental damage

    The study released by the worldwide fund for nature (WWF) and the civil society Coalition on oil and gas (CSCO) titled “Safeguarding People & nature in the East African Crude Oil (EACOP) Pipeline,” expresses fears of a possible pollution of fresh water pollution in the Lake Victoria basin.

    According to a study, the East African crude oil pipeline will cross Kagera River, the largest river flowing into Lake Victoria.

    “The probability of leakage and spillage within the Lake Victoria watershed area is even greater given it is an active seismic area” the report stated.

    The report was released in July 2017 as a preliminary Threat Analysis (PTA) of the East Africa Crude Oil Pipeline (EACOP).

    The Crude oil covering 1,445 km will transport crude oil from Hoima district in Western Uganda to Tanga port in Tanzania.

    The Pipeline project was commissioned by President Museveni And his Tanzanian counterpart John Pombe Magufuli in November 2017,.

    By Oil in Uganda correspondent, Bunyoro Edited by Flavia Nalubega

  • king-fisher-2-320x206

    NEMA reviews environmental concerns over Tilenga project

    The National Environment Management Authority (NEMA) is seeking public comments on the Environmental and Social Impact Assessment (ESIA) report for the Tilenga oil project.

    The name Tilenga is derived from two local names for the Uganda Kob (Antelope) which is called “Til” in Acholi and “Engabi” in Runyoro-Rotoro.

    A notice which has been pinned on public notice boards in Buliisa district indicates that NEMA received the ESIA from Total E&P Uganda and Tullow Uganda operations Pty Ltd for the proposed Tilenga project.

    Under the Tilenga project, the Government through its licensed oil companies has discovered commercially viable oil deposits north of Victoria Nile in Murchison falls national park and south of Victoria Nile in Buliisa district.

    The project includes jobi-Rii, Gunya, Ngiri, Kasemene, wahrindi, Nsoga, Kigogole oil fields. Composition According to the project documents which oil in Uganda has seen, the Tilenga project is composed of well pads, a central processing facility and other associated facilities, production and injection network of pipelines and cables, Bugungu airstrip, Tangi operation camp, a water abstraction system, victoria Nile crossing, river Nile pipe crossing and some roads.

    The project also includes temporary construction camps, construction support base, a logistical check point in Masindi and borrow pits.

    “The public is further notified that the outcomes of the public review will contribute towards making a final decision of the project in accordance with the Environment impact assessment regulations” a notice released by the NEMA Executive director Dr Tom Okurut reads in part.

    According to the notice, members of the public have been asked to submit their comments by November 9th 2018. CSO Petition 13 civil society organisations have asked NEMA to hold public hearings to enable locals have an input in the studies.

    “It is through public hearings that oil host and affected communities, the poor, marginalised and illiterate will be able to make comments on the ESIA to enable NEMA make a decision based on the collective input of all concerned stakeholders” the CSOs said in a joint letter to the NEMA executive Director.

    According to the CSOs which are working to prevent the impacts of oil on biodiversity from Buliisa, Hoima, Kasese, Greater Masaka, South Western Uganda and Kampala, they are concerned that in the notice, NEMA did not indicate that it will call for public hearings before making any decision on the ESIA.

    The concerns of the CSOs are contained in a letter dated October 17, 2018 which was submitted to NEMA by the AFIEGO Chief Executive Director on behalf of the CSOs.

    The Environmental Impact Assessment (EIA) Regulations of 1998 mandate NEMA to call for a public hearing where there is controversy or where a project has trans boundary impacts, the CSOs argued.

    “The Tilenga oil project is controversial and will have trans boundary impacts. The project’s activities will include drawing of water from Lake Albert, whose boundaries remain a challenge between Uganda and the Democratic Republic of Congo (DRC). It should be noted that even the existence of many agreements including the Uganda Zaire 1990 Agreement, the 2007 Uganda-DRC Ngurdoto Agreement and others whose main objective was to address the peace and security challenges in the Uganda-DRC border areas through among other things providing for a framework for benefit sharing and conservation of shared resources such as the Lake Albert waters, fish and others have failed to achieve lasting results” Dickens Kamugisha, the Chief Executive officer of the Africa institute for Energy Governance(AFIEGO).

    The CSOs warned that if the Tilenga project is not well handled, it may worsen the conflicts and loss of lives as well as environmental destruction in Uganda and the DRC.

    “We need public hearings to ensure effective public consultations that can build consensus not only among Ugandan stakeholders but also stakeholders across the borders who are likely to be affected by the Tilenga project” said Kamugisha, a lawyer.

    The CSO stated that available evidence indicates that NEMA has the skills and interest to do a good job but it cannot effectively play its role amidst weak and outdated laws.

    It is unfortunate that for over four years, government and parliament have failed or ignored the need to complete the enactment and formulation of the new environmental laws such as the National Environment Bill of 2017, the draft EIA and Strategic Environment Assessment (SEA) regulations of 2017, the Uganda Wildlife Bill and others. Without such relevant laws to among other things improve NEMA’s independence, funding, penalties for environmental offenders, the CSOS stated in their five-paged petition to NEMA.

    It is especially unfortunate that todate, as government and oil companies are finalising major oil decisions that will have long lasting environmental and social impacts, there is no specific provision in our current laws including the 1995 National Environment Act, the Uganda Wildlife Act and others that specifically provides for NEMA to reject oil activities even in the most critical biodiversity areas such as Lake Albert, River Nile, Budongo Forest, Murchison Falls National Park, and others of national and international importance, the petition which was received and stamped by NEMA on 18th October reads in part. Demands

    “NEMA should use its powers not to issue any certificate of approval for oil projects as a condition to force parliament and government to complete the new environmental laws and regulations” the petition stated.

    The CSOs have asked government to establish a multi-stakeholder committee comprised of actors from government, the private sector, religious and cultural groups, CSOs, the academia and others to act as an independent multidisciplinary oversight body to promote compliance with environmental conservation tools such as EIA, SEA, ESIA.

    The CSOs have further asked NEMA to delay any decision to issue a certificate of approval for the Tilenga ESIA until the new environmental laws and regulations are put in place by government and parliament. This will help the country to stop engaging in oil activities based on a weak and outdated environmental legal framework, the petition added.

    The CSOS that petitioned include the Africa institute for Energy Governance (AFIEGO), National Association of Professional Environmentalists (NAPE), Environmental Conservation Trust of Uganda (ECOTRUST), Guild Presidents Forum on Oil Governance (GPFOG), Center for Constitutional Governance (CCG), South Western Center for Policy and Advocacy (SOWIPA), World Voices Uganda (WVU), Community Transformation Foundation Network (COTFONE), Greater, Green Organisation Africa (GOA)-Masindi, Oil Refinery Residents Association (ORRA)-Hoima, Kakindo Orphans Care-Buliisa, Girl Power foundation-Kasese, Friends of Nature-Kasese.

    By Oil in Uganda correspondent, Bunyoro

  • Uganda’s Minister for Energy and Mineral Development, Irene Muloni (R), poses for a picture with Roger Cressey, CEO of Armour Energy, after signing a Production Sharing Agreement (PSA), in Kampala

    NEMA reviews environmental concerns over Tilenga project

    The National Environment Management Authority (NEMA) is seeking public comments on the Environmental and Social Impact Assessment (ESIA) report for the Tilenga oil project.

    The name Tilenga is derived from two local names for the Uganda Kob (Antelope) which is called “Til” in Acholi and “Engabi” in Runyoro-Rotoro.

    A notice which has been pinned on public notice boards in Buliisa district indicates that NEMA received the ESIA from Total E&P Uganda and Tullow Uganda operations Pty Ltd for the proposed Tilenga project.

    Under the Tilenga project, the Government through its licensed oil companies has discovered commercially viable oil deposits north of Victoria Nile in Murchison falls national park and south of Victoria Nile in Buliisa district.

    The project includes jobi-Rii, Gunya, Ngiri, Kasemene, wahrindi, Nsoga, Kigogole oil fields. Composition According to the project documents which oil in Uganda has seen, the Tilenga project is composed of well pads, a central processing facility and other associated facilities, production and injection network of pipelines and cables, Bugungu airstrip, Tangi operation camp, a water abstraction system, victoria Nile crossing, river Nile pipe crossing and some roads.

    The project also includes temporary construction camps, construction support base, a logistical check point in Masindi and borrow pits.

    “The public is further notified that the outcomes of the public review will contribute towards making a final decision of the project in accordance with the Environment impact assessment regulations” a notice released by the NEMA Executive Director Tom Okurut reads in part.

    According to the notice, members of the public have been asked to submit their comments by November 9th 2018. CSO Petition NEMA 13 civil society organisations have asked NEMA to hold public hearings to enable locals have an input in the studies.

    “It is through public hearings that oil host and affected communities, the poor, marginalised and illiterate will be able to make comments on the ESIA to enable NEMA make a decision based on the collective input of all concerned stakeholders” the CSOs said in a joint letter to the NEMA executive Director.

    According to the CSOs which are working to prevent the impacts of oil on biodiversity from Buliisa, Hoima, Kasese, Greater Masaka, South Western Uganda and Kampala, they are concerned that in the notice, NEMA did not indicate that it will call for public hearings before making any decision on the ESIA.

    The concerns of the CSOs are contained in a letter dated October 17, 2018 which was submitted to NEMA by the AFIEGO Chief Executive Director on behalf of the CSOs.

    The Environmental Impact Assessment (EIA) Regulations of 1998 mandates NEMA to call for a public hearing where there is controversy or where a project has trans boundary impacts, the CSOs argued.

    “The Tilenga oil project is controversial and will have trans boundary impacts. The project’s activities will include drawing of water from Lake Albert, whose boundaries remain a challenge between Uganda and the Democratic Republic of Congo (DRC). It should be noted that even the existence of many agreements including the Uganda Zaire 1990 Agreement, the 2007 Uganda-DRC Ngurdoto Agreement and others whose main objective was to address the peace and security challenges in the Uganda-DRC border areas through among other things providing for a framework for benefit sharing and conservation of shared resources such as the Lake Albert waters, fish and others have failed to achieve lasting results” Dickens Kamugisha, the Chief Executive officer of the Africa institute for Energy Governance(AFIEGO) said.

    The CSOs warned that if the Tilenga project is not well handled, it may worsen the conflicts and loss of lives as well as environmental destruction in Uganda and the DRC.

    “We need public hearings to ensure effective public consultations that can build consensus not only among Ugandan stakeholders but also stakeholders across the borders who are likely to be affected by the Tilenga project” said Kamugisha, a lawyer.

    The CSO stated that available evidence indicates that NEMA has the skills and interest to do a good job but it cannot effectively play its role amidst weak and outdated laws.

    It is unfortunate that for over four years, government and parliament have failed or ignored the need to complete the enactment and formulation of the new environmental laws such as the National Environment Bill of 2017, the draft EIA and Strategic Environment Assessment (SEA) regulations of 2017, the Uganda Wildlife Bill and others. Without such relevant laws to improve NEMA’s independence, funding and penalties for environmental offenders, NEMA can hardly operate rightfully.

    ‘It is especially unfortunate that todate, as government and oil companies are finalising major oil decisions that will have long lasting environmental and social impacts, there is no specific provision in our current laws including the 1995 National Environment Act, the Uganda Wildlife Act and others that specifically provides for NEMA to reject oil activities even in the most critical biodiversity areas such as Lake Albert, River Nile, Budongo Forest, Murchison Falls National Park, and others of national and international importance,” the petition which was received and stamped by NEMA on 18th October reads in part. Demands

    “NEMA should use its powers not to issue any certificate of approval for oil projects as a condition to force parliament and government to complete the new environmental laws and regulations” the petition stated.

    The CSOs have asked government to establish a multi-stakeholder committee comprised of actors from government, the private sector, religious and cultural groups, CSOs, the academia and others to act as an independent multidisciplinary oversight body to promote compliance with environmental conservation tools such as EIA, SEA, ESIA.

    The CSOs have further asked NEMA to delay any decision to issue a certificate of approval for the Tilenga ESIA until the new environmental laws and regulations are put in place by government and parliament. This will help the country to stop engaging in oil activities based on a weak and outdated environmental legal framework, the petition added.

    By Oil in Uganda correspondent, Bunyoro

  • President Yoweri Museveni. Photo from Galaxy FM 100.2

    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

  • Jimmy Mugerwa

    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.

  • Uganda’s Minister for Energy and Mineral Development, Irene Muloni (R), poses for a picture with Roger Cressey, CEO of Armour Energy, after signing a Production Sharing Agreement (PSA), in Kampala

    Australian oil firm Armour Energy joins Uganda’s upstream oil sector

    Muloni Tables Kanywataba Oil Agreement before Parliament signed with Armour

    Gov’t earns Shs 1 bn in signature bonus for Kanywataba oil block

    Edward Ssekika

    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.

    PSA rubbished

    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.

  • Emily Drani, Executive Director CCFU

    Cultural institutions agitate for fair share in extractives sector

    On 21st June, the three prime ministers from Ker Kwaro Acholi, Alur Kingdom and Bunyoro Kitara Kingdom launched Guidelines to equip cultural leaders in their institutions in managing their relationship with the oil and gas companies as productively as possible.

    The guidelines reflect the three cultural institutions’ determination to play an active role in preserving tangible and intangible cultural heritage, in ensuring sustainable development and in fostering peace amongst communities.

    Oil in Uganda’s Robert Mwesigye talked to the Executive Director Cross Cultural Foundation Uganda, Emily Drani, on the milestone the Foundation has made and their expectations following the landmark event of the launch of the guidelines by cultural institutions for oil and gas companies operating in Uganda’s Albertine region.

     

    What have been your major achievements 10 years down the road?

    Our achievements over the ten years especially with regards to what we are doing right now is that we have come to understand the relevance and role of cultural institutions; we have taken into account some of their strengths but as well as their weaknesses as we have worked with them especially those willing to address those weaknesses through capacity building, documenting and reflection events. We have documented statements that they have made linked to the citizens manifesto.

    In that statement they have highlighted their responsibility but also the demands they are making from the Uganda government and development partners. But they have also made commitments in respect to what role they play today. Of course the role of cultural leaders has evolved today. What they did 50 years ago is not what they are doing today. And one of their roles is protection of the natural resources. There are about twenty two points and this is just one of the points where they said we have a role to protect the environment because of its cultural significance, not its economic value. And so the question is what shows and how can you guide other cultural leaders who have just become leaders today about that responsibility. So today is actually about the responsibility they have taken because we’ve worked with many cultural leaders across the country and they might have responsibility but it’s not documented. It sounds very general and something that is very hypothetical so this is a practical way that they have committed on paper that they are responsible for a number of issues that they are going to take on that responsibility.

    Uganda right now is abuzz with extractives development for which cultural institutions have been advocating to have major participation. Do you feel government is responding or is there need to do more?

    I think there is much more that needs to be done to harness the influence and authority that cultural institutions have. There has been often a thin line between their authority as institutions and then their political authority. And therefore they have always been treading very carefully. So when it’s a purely development agenda they are very outgoing and very forward. But when there’s a very thin line as to whether they’re now overstepping that line you find they’re not very assertive. So much as the laws of energy and use of natural resources have been taking place they have not asserted themselves to say yes, we are key actors in all this and we need to be consulted and we need government to recognize that the resources were talking about also have cultural significance and that’s where we come in, because in the past of course they were managing those resources for economic benefit and now they are told that is something beyond their mandate; they are supposed to focus on culture. But even then they can still make a case for land; they can still make a case for natural resources where there’s traditional medicine, there’re secret sites which fall directly under their mandate but they’re not very forthcoming. Government has taken advantage of that and actually not consulted them; but also for government to consult you need to demand and be acknowledged that this is a place where you can make a contribution.

    How would you rate the level of responsiveness by oil exploration companies to the call to conserve cultural sites/ heritage while carrying out their activities?

    I think there are a couple that have been quite forthcoming because I know Bunyoro kingdom received funding from think Tullow ( Tullow funded Bunyoro Kingdom to the tune of 1000USD to facilitate construction of a museum that never was. This was meant to enhance the protection of cultural Heritage visa viz oil and gas operations ). They gave them a significant amount of money to build a cultural centre and that was without too much lobbying. They felt that was there corporate social responsibility. But I’m not sure about the others. I have not heard because we’ve done some reviews on the relationship between cultural institutions and these oil companies where they have just gone out of their way to (i) recognize culture matters (ii) to give some incentives to the communities to preserve their culture but (iii) also to find out if they can be guided where there’s a space of cultural significance and if there is any way they can avoid that. That on record has not been very strong. You might want to dig deeper on how a number of sites have been desecrated.

     

    The cultural institutions are more concerned about oil & gas; have they considered other extractives? Because we’ve been to Moroto, the situation there is not so rosy.

    No. I think the oil has brought to the fore that there’s significant benefit that can accrue to the community. But in other areas; for instance, there’s marble in Moroto but the council of elders there is very small. We know there’s salt extraction, there are different minerals being extracted from different places. I think some of the cultural institutions think that is a government preserve. And especially where there is a bit of contention over ownership as you have seen Bunyoro clashing over the forest with the National Forest Authority. So that I think has made a number of them not to be very forceful in their demand not only to be consulted but to benefit.

     

    The level of awareness and agitation for inclusivity in the extractives sector in Uganda by cultural institutions is quite prominent in the Bunyoro region. Do you feel that resonates elsewhere in mineral host communities?

    For us as an organisation usually respond to need. Of course we have different communities where there are different resources; it could be a forest; it could be a natural resource of another nature, mineral or something. But if the cultural institution itself has not seen that need, we are not going to go there and say you need a role in this. They need to say traditionally we have been responsible and now we’re being left out. Then we can partner because they have their traditional mandate but it’s not our job to go and start instigating that responsibility and interest.

     

    An MP at a workshop said there was a resurgence of ethno-nationalism where cultural institutions are agitating for priority in sharing on what is a national resource. What is your view?

    Well CCFU tries to learn from other countries. And learning from other countries we actually invited cultural leaders from Ghana where there is gold. And in Ghana fortunately for them the government recognizes cultural institutions. They are actually part of the legislation. But they have royalties there and I think that helps to diffuse some of the conflicts that you might have with the government and I think they do have a case because the land is part of what you should call Bunyoro Kingdom. So we don’t see any problem with Bunyoro kingdom demanding to have a percentage of the royalties. It’s maybe what it’s going to be used for or whether the community is going to benefit. That’s a question to be answered. But the principle that they should receive royalties is a valid one. Absolutely!

    Going forward after today’s dialogue what are your expectations?

    What we are hoping to see is that some of the three cultural institutions that are here pick up on some of the guidelines and operationalise them. It’s difficult for them because they always have challenges with resources but they are things that can be done practically without finances. And they can have negotiation with oil companies and say this is what our desire is and it’s standard now which has been set so we expect them to use it and for those who have not had an opportunity to develop guidelines we hope they’ll be able to borrow some of the principles in there. When they are dealing with investors, people in the extractives industry they’ll say yes, please could you adhere to some of these principles because it’s about the preservation of our heritage.

    Robert Mwesigye

    Oil.Uganda@actionaid.org

     

  • Elly-Karuhanga

    Chamber of Mines and Petroleum get new leaders

    Chamber of Mines and Petroleum get new leaders

    Dr Josephine Wapakabulo, CEO, UNOC joins the Chamber as special advisor, Elly Karuhanga retains his seat as chairman

    The Uganda Chamber of Mines and Petroleum (UCMP) has elected new board members. In the election last week, UCMP members re-elected Dr Elly Karuhanga as the board chairman. Karuhanga is the founding the founding chairman for the Chamber.

    In a new twist, Stanbic Bank, Managing Director, Patrick Mweheire takes over from Richard Kaijuka as the Chamber’s new vice chairman. Kaijuka has been the founding vice chairman for the Chamber. Sam Thakkar from UHY Thakkar & Associates, replaces Paul Sherwen, as the General Secretary, Jeff Baitwa, the Managing Director, Threeways Shipping continues as the treasurer.

    Launched in 2010, UCMP is a not-for-profit that represents the interests of private players in minerals and petroleum sectors that lobbies government to provide a conducive environment for investing in the extractive sector. It is credited for having pioneered the annual Mineral Wealth Conference and the Oil and Gas Convention that brings key players together to shape the discuss issues that affect the minerals and oil and has gas sectors.

    Other members of the influential nine-member board, include; Adewale Fayemi (General Manager, Total E&P BV), Xiao Zong Wei (CNOOC Uganda Limited), Daniel Peterson (Managing Director, Hima Cement), Nicholas Ecimu (Partner, Sebalu and Lule Advocates) and Abdul Kibuuka (Corporate Affairs Manager, Tullow Uganda Limited).

    The Council’s Advisory Committee has also changed, with more positions created. The committee has Oliver Lalani from Roofings Group (Minerals), Tony Otoa from TOTAL E&P (Oil & Gas), Patricia Ojangole from the Uganda Development Bank (Finance), Allan Mugisha from Ernst & Young (Tax & Investment), Pamela Natamba from PWC (Local Content), Miriam Magala from the Uganda Insurers Association (Insurance), Gerald Mukyenga from Multilines International (Health, Safety & Environment) and Carol Athiyo from AON Risk Solutions (Public Relations).

    Others are Joshua Ogwal, a Partner, Ligomarc Advocates, (Legal & Advisory), Natasha Venus from Sipa Exploration (Human Resources), Dilip Bhandari from Spedag Interfreight (Logistics), Peter Bitarakwate from ZAKHEM (Special Advisor to the Chairman), Dr. Josephine Wapakabulo, Chief Executive Officer, Uganda National Oil Company (Special Advisor) and Aggrey Ashaba from GCC Services (International Relations).

    The advisory committee aids the Chamber council. The council’s primary role on the other hand is to help the recently created Board of Trustees (BOT) to oversee the general management and operation of the Chamber.

    However, Kaijuka bowed as the vice chairman of the Board of Directors of the UCMP to head the newly establish Board of Trustees. Kaijuka will be deputized on the board of Trustees by Jimmy Mugerwa (General Manager, Tullow Uganda Limited), while Gen Salim Saleh’s sister in-law, Kellen Kayonga is the new treasurer board of trustees. Kayonga is the boss of Asker Security, a private security firm and a dealer in the minerals sector.

    Other members of the board of trustees include; Mr Paul Sherwen (General Secretary) and Gordon Sentiba, (Astor Finance Plc) as a member.

    The Board of Trustees (BOT) was one of the new additions in the amended UCMP constitution, last year, and will be charged with providing overall governance to the UCMP besides acting as the custodian of the Chamber’s assets and resources.

    Dr Karuhanga hailed the new developments as heralding a new chapter in the UCMP’s journey. “The Chamber has continued to evolve to respond to the changing landscape in the petroleum and mining sectors in Uganda. With a good blend of youth and senior citizens, we are positive that the new leadership is well structured to revitalize our focus and direction as the country eyes First Oil in 2020,” he said.

    “At the top of our agenda, will be advocating for the creation of a ‘Dream Team’ compromised of government officials and us in the private sector that will make sure our local content aspirations are met through skilling as many Ugandans as possible in all relevant and practical areas while ensuring all timelines are adhered to, to beat the 2020 target.” Dr Karuhanga added.

    Karuhanga reiterated UCMP’s appeal for more transparency in the minerals sector, Svalue addition using the latest technologies

    By Our Hoima Correspondent and Edward Ssekika

    Oil.Uganda@actionaid.org