implementation of the East African Crude Oil Pipeline (EACOP) project Archives -

OPINION: Naysayers about our oil projects will choke on their vomit

Graha Admin — Tue, 25 Oct 2022 08:45:58 +0000

OPINION: Naysayers about our oil projects will choke on their vomit ~By Deo Otim

Lately, there has been a lot of exchange and dispute about the different oil projects the country is undertaking from different individuals both on the local and international scene, coined in protest of a rather would be a feasible project that will ramp up a lot of livelihoods if its progress is registered, the oil and gas sector has been substantial for developing-countries as a direct enabler of socio-economic transformation and growth globally, coupled with enormous benefits as there is.

To others its politically motivated to bash all successes in place due to different shades of opinion, one can hardly justify this cause but as is human to blunder, one would simply anticipate a mindset shift that would blindly not lead them to recuse themselves from the naivety of a seemingly to them a good bad.

Oppositionists have been continuously insisting that the oil activities have yielded nothing of interest to Ugandans citing gross human rights violations, and destruction of livelihoods and biodiversity yet it’s the slightest of truth considering the already existing beneficiaries who were primary residents from the different areas where the projects are being undertaken.

Approximately 1.4 billion of Uganda’s 6.5 billion barrels of proven oil reserves, located mostly at the western border with the DRC are estimated to be economically recoverable.

French firm TotalEnergies, and CNOOC, hold licenses to develop these resources. In February 2022, TotalEnergies EP Uganda, CNOOC Uganda Limited, the Uganda National Oil Company (UNOC), and the Tanzania Petroleum Development Corporation (TPDC) announced that they had reached the Final Investment Decision (FID) for the upstream oil production projects and the East African Crude Oil Pipeline (EACOP).

Developing the oil sector requires several billion dollars of infrastructure investment to build and support a refinery, two central processing facilities, and the 1,445 km EACOP – the world’s longest heated pipeline.

Uganda, Tanzania, and oil companies on Tuesday, February 1, 2021, signed the long-awaited Final Investment Decision (FID) which paved a way for massive investment in Uganda’s oil and gas sector making international oil companies French Total Energies and China’s CNOOC the key investors with the governments of Uganda and Tanzania as the client’s stakeholders.

H.E Yoweri Kaguta Museveni, the president of the Republic of Uganda and Tanzania’s Vice president Dr, Phillip Mango who represented H.E Samia Hassan Suluhu, the president of the Republic of Tanzania witnessed the signing of the Final Investment Decision (FID) an enabler of the next development and construction phases and commencement of commercial oil production.

Achieving the Uganda oil FID, led to the escalation of coordination, delivery promptly of equipment to the site, local participation, and approvals, and led to continuous support by the government of Uganda to the oil companies to execute their work. The process has also allowed governments positive action and funds have been mobilised.

The Oil industry has thus far positively impacted the economy through various programmes, Ugandans have already got jobs, and close to 1,600 jobs have been earmarked to be created as well as provision of goods and services to the industry which will expand Uganda and Tanzania’s tax base.

The signing of the crucial Final Investment Decision (FID) by the licensed companies which unlocked an investment of between US$15-20 billion in Uganda’s oil and gas projects signified financing the development of Uganda’s oil discoveries and build a pipeline that will turn the landlocked East African nation into a significant crude oil exporter by TotalEnergies EP Uganda, CNOOC Uganda Limited, Uganda National Oil Company, and EACOP Ltd.

Following the FID signing, ill-intentioned activists transparently and agreeably in Uganda and other parts of the world started a negative campaign, to curtail the progress in Uganda’s oil and gas developments and the country’s socio-economic growth and development which sought to deny Ugandans and the East African region the benefits and opportunities brought about by the oil and gas sector.

One of the oil projects under attack is the East African Crude Oil Pipeline (EACOP), the activists raised contentious issues on the Environmental impact of oil and gas projects, alleged poor governance (politics), and Projected misuse of oil and gas revenue, however, Uganda’s oil and gas resources are being developed responsibly and sustainably to create lasting value for all Ugandans.

EU Parliament recently raised serious questions about the actions of French energy giant TotalEnergies in Uganda, with Members of the European Parliament (MEP) saying the oil pipeline project has led to evictions and arrests.

Government is conscious of the environmental, social, and governance issues associated with the petroleum industry, and has put in place adequate measures to address any potential negative impacts and harness the opportunities.

The East African Crude Oil Pipeline (EACOP) by Total E&P project is one of the midstream commercialisation projects for Uganda’s oil and gas industry the longest heated crude oil pipeline in the world at 1,443 km, running from Kabaale in Hoima District to Tanga Port in Tanzania.

Total E & P has 72% of the 1,443km pipeline, Uganda has 15% shareholding, the China National Offshore Oil Corporation (CNOOC) owns 8%, Tanzania’s stake is 5%, and Uganda’s interest in the pipeline is managed by the Uganda National Oil Company while the Tanzania Petroleum Development Corporation oversees Tanzania’s interests.

The government has instigated a range of mitigating measures and is ensuring the development is safe and the most technologically sophisticated of its kind to be built globally, placing a robust regulatory regime and several laws passed including the Petroleum Upstream (Exploration, Development, and Production) Act and Midstream (Refining, Conversion, Transmission, and Midstream storage) Act, that came into force in 2013 together with these corresponding regulations in 2016.

The ESIA for Kingfisher, Tilenga, and the EACOP projects were done following the laws of Uganda and in full consideration of and with due regard to all the agreements that Uganda is a party to, including the UN’s 2030 Agenda for Sustainable Development and to the Sustainable Development Goals; UN Paris Climate Agreement; the International Energy Agency Global Energy Review 2021; the Cotonou Agreement.

To ensure the sustainable development of Uganda’s oil and gas resources, in collaboration with the regulators and various partners, TotalEnergies EP Uganda one of the international oil companies massively investing in Uganda’s oil and gas sector has been undertaking various initiatives and actions around Environment and Biodiversity conservation, Social and Human Rights, including restoring and improving living standards of project affected people and the communities in the Tilenga project area an onshore project located in a sensitive context both environmentally and socially.

Like many African countries, Uganda is still a developing country, which is energy poor, and needs different natural resources to power the development needs and improve our people’s lives.

Therefore, the attacks on Uganda’s oil projects are attacks on Uganda’s development and uplift from poverty, energy insecurity, and human capital development.

Deo Otim is a Communications Officer at Government Citizen Interaction Center (GCIC)-State House

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Oil-Pipeline compensation upsets Rakai residents

Male Solomon Grace — Fri, 20 Aug 2021 15:27:37 +0000

Oil-Pipeline compensation upsets Rakai residents. A section of persons affected by the impending construction of the East African Crude Oil Pipeline-EACOP (https://eacop.com/) is frustrated as the project implementers move to secure land in Kyotera and Rakia districts.

The aggrieved include 21 households that will be physically displaced as the government and partners undertake constructions of a 30-meter wide pipeline to transport Uganda’s crude oil from Hoima to the Chongoleani peninsular in Tanga, Tanzania. The project will affect 760 people in the districts of Rakai and Kyotera.

But some of the affected persons in the area, are dissatisfied with the valuation figures that were given to them during the disclosure exercise which was conducted in June by the project implementers.

Joseph Zabasajja, a resident of Lusese village in Nabigasa Sub-county, Kyotera district is one of the affected persons that have come out to dispute compensation figures, even after signing consent forms that were presented to them by the valuation teams. His residential house will be demolished and his modest banana and coffee plantations cleared to open the route for the pipeline.

According to the project’s approved Resettlement Action Plan, Zabasajja qualified for monetary compensation for land and other properties lost as well as getting a new house in which his family will be resettled. The compensation schedule URN has seen indicates that Zabasajja is eligible for a monetary reward of 80.9 million Shillings and a four-bedroom house which will be constructed by the compensating agency.

He is however dissatisfied with the compensation entitlements arguing that they are inadequate to enable his family to regain their full life upon relocation. “What I’m getting in return cannot put us back to the life we are in currently. Much as I appended a signature on compensation forms, it was not done out of will but because of lack of choices,” he says. Zabasajja adds that his properties are worth a monetary value of at least 350 million Shillings.

Zabasajja’s current house has six rooms, while the coffee and banana gardens both seat on 1.6 acres of land, and this, he says, is what has sustained his family for decades. He adds that losing all this life in exchange for entitlements that were allocated from the project is illogical.

Abby Kavuma, a resident of Kituntu village in Lwanda Sub-county, Rakai district is also losing two acres of land to the EACOP project, at a compensation cost of 21 million Shillings. His land had banana and coffee gardens, while part of it was used for grazing animals while a small plot of it was being used for subsistence crop cultivation.

But Kavuma disputes the compensation rates that were used to define the value of their properties, saying they are not proportionate compared to the accumulating land prices in the area. He argues that with such a little sum of money, he can hardly obtain a similar piece of land in the Rakai district.

Similarly, Sulaina Nambabali, another affected person in the Rakai district expresses disappointment that she may not realize her expectation of improving her livelihood using the compensation fees obtained from the project. From her 0.94 acres affected by the pipeline, Nambabali expected at least 50 million Shillings, a figure that doubles that was allocated to her in the valuation report.

Regardless of her current status of occupancy as a tenant on a private mailo, for which she pays annual nominal ground rent of 12,000 Shillings to the landlord, Nambabali argues she would still make reasonable earning if she parcelled the portion into plots for sale to private individuals than forfeiting it to the EACOP project where she attracts meager returns.

Besides, the sugarcane gardens that will be cleared, Nambabali has two fishponds that were dug about six meters away from the demarcated pipeline route. These were however not listed for compensation, even when in her own assumption, they will be affected because the water flows into the ponds which will interfere with her work as the pipeline infrastructure is laid.

But Angela Nalwanga, the Head of Stakeholders Management and Social Affairs at the East African Crude Oil Pipeline-EACOP project, partly attributes the underlying frustrations to land tenure systems in which many aggrieved PAPs are covered.

She explains that in many parts of the central region, the majority of the project-affected persons-PAPs are occupants of Mailo land, where ownership rights are shared between the landlord and occupants, which also leads to sharing of compensation entitlements in percentages of 40 to 60 respectively.

Nalwanga adds that their field teams explained all the modalities to the PAPs during their engagement meetings, advising those who are still unsatisfied with the process to forward their complaints to the project Grievance Management Committees established in their areas for possible review.

He also indicates that some of the uncontended persons could be basing their arguments only on monetary compensations, saying the project has a package of other benefits for the affected persons, some of which include supporting them with alternative livelihood projects, improved housing among others which she says nonmonetary value.

However, her explanation is not convincing to Michael Kalemba who is also destined to forfeit his rights on a 0.7-acre piece of land located in the Lwanda trading center at a gross compensation cost of 7.6 million Shillings as compensation. Kalemba who owns a land title in the area argues that compensation rates used in the project are so unrealistic as compared to the apparent value of their properties both for titles and lease and leaseholders.

Kyotera District Chairperson Patrick Kintu Kisekkulo says that they have formally notified the Ministry of Energy and Mineral Development about the public frustration about the project, which qualifies for a reassessment of the valuation rates in the area. He warns that the project stands to lose the social contract, should such grievances remain unattended before actual implementation.

Meanwhile, Yisito Kayinga Muddu, the programs coordinator of Community Transformation Foundation Network (COFTONE); a member of the Civil Society Coalition on Oil and Gas reveals that their monitoring teams have so far registered 98 people with grievances about the project. He says that they are currently working on modalities of securing for them legal representation to have their concerns argued before courts of law.

The East African Crude Oil Pipeline; a key project in the production and transportation of Ugandans crude oil mineral resources will be executed with a joint partnership between the Uganda National Oil Company-UNOC, Tanzania Petroleum Development Corporation-TPDC, Total Energies, and China National Offshore Oil Corporation Limited, at an estimated investment cost of USD 3.5 billion. The EACOP pipeline route is estimated to occupy a land area of 2,740 acres in Uganda, running a distance of 296-kilometres in ten districts before entering Tanzania.

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Tullow completes $575 million sale of Uganda assets to Total

Male Solomon Grace — Tue, 10 Nov 2020 18:47:22 +0000

Uganda has proven crude oil reserves of 6.5 billion barrels, about 2.2 billion of which is recoverable.

The International Monetary Fund was quoted in 2013 as saying that these reserves including those located in Buseruka Subcounty of Hoima District; are the fourth-largest in sub-Saharan Africa, behind Nigeria, Angola, and South Sudan.

Tullow Oil plc (“Tullow”) has on this day announced that the sale of its assets in Uganda to Total was completed with $500 million consideration.

Tullow is also due to receive a further $75 million when a Final Investment Decision is taken on the development project plus contingent payments linked to the oil price payable after production commences.

The closing of the transaction follows the satisfaction of all deal conditions, announced on 21 October 2020, which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2.

Although Tullow will retain a financial link to the development project through the potential contingent payments, the closing of this transaction marks Tullow’s exit from its licences in Uganda after 16 years of operations in the Lake Albert basin.

Tullow now has a net debt of $2.4 billion and available liquidity of $1 billion. Rahul Dhir, CEO, and Les Wood, CFO, will lay out their plans for the Group in the coming years at a Capital Markets Day which is yet to take place on 25 November 2020.

Last month the president of Uganda H.E. Yoweri Kaguta Museveni and his Tanzanian counterpart H.E. John Pombe Magufuli agreed in principle to fast track the implementation of the East African Crude Oil Pipeline (EACOP) project in a bilateral meeting held in Chato, Tanzania after Uganda had signed the Host Government Agreement (HGA) with Total on the EACOP Project.

EACOP will become East Africa’s first major oil pipeline. The $3.5bn project will connect Uganda’s oil fields to port Tanga of Tanzania on the Indian Ocean for about 1,445 km (898 miles).

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