Uganda News

Despite calls to go green, Uganda is investing in oil.

A nascent oil industry is transforming this area of the Rift Valley, a geological scar that extends through East Africa.

The heat is terrible; a haze obscures the sky, lake, and land; kingfishers dive and rise as if toying with the wind blowing off Uganda’s Lake Albert, which is home to massive oil deposits.

A nascent oil industry is transforming this area of the Rift Valley, a geological scar that extends through East Africa.

There are environmental concerns and questions about whether an oil boom is too late, but there is no denying that change is coming to the broad valley floor behind the towering escarpment.

On one end, there are iron-sheet buildings, while on the other, excavators are preparing the land for the Kingfisher oil field’s main processing facility.

A once-dangerous dirt road heading down the valley side has been replaced by a meandering tarmacked roadway that transports the necessary equipment.

One of the places where oil will be pulled out of the ground is being prepped.
An environmental officer checks that the cap on an oil well head is airtight and clear of gas leaks near where waves lap the lake’s beach.

By 2025, the first of a projected 1.4 billion barrels of oil from this and other wells across the region should be pumped.

Uganda, China National Offshore Oil Corporation (CNOOC), and TotalEnergies, a French company, inked the Final Investment Decision (FID) at the beginning of the month, marking a significant step forward in the country’s development.

The joint venture will receive a total investment of more than $10 billion (£7.4 billion). The funds will be used to build multiple upstream facilities, as well as the East African Crude Oil Pipeline, which will extend 1,400 kilometers (870 miles) from Uganda’s landlocked border to Tanzania’s port of Tanga.

Grazing land has been cleared.

Hundreds of earthmovers crisscross a building site for TotalEnergies’ processing complex at another Ugandan oil field, again close to Lake Albert but 100 kilometers north-east of Kingfisher.

Before being sent to a refinery roughly 100 kilometers distant, the crude oil will be cleansed of contaminants and separated from gas here.

A large area of what was once grazing ground has already been removed, covering more than 300 hectares (741 acres), and the construction process creates thick plumes of dust.

The purchase of the site’s land has already impacted around 600 people in the area.

Another 4,000 people will be affected by other works such as a feeder pipeline, roads, and wells.

According to the French multinational’s officials, 60% of them have been properly reimbursed.

Fausta Tumuhairwe, on the other hand, has had her life disturbed twice.

To make room for the oil refinery, she gave up more than half a hectare of farmland, and in 2017, she was relocated and compensated with land and a house.

The single mother of four is still waiting for compensation for the loss of her “feeling of freedom,” according to her.

“My land serves as a bank.” I raise food, earn money, and pay for my children’s schooling. Once it’s been [earmarked for development], I can’t utilize it for long-term crops like coffee.”

Fidelis Kiiza and a group of nine other people in Buhumuriro hamlet gave up part of their farmland in exchange for a feeder pipeline that will transport oil from CNOOC’s Kingfisher field to the refinery.

They received compensation for their land as well as a program to restore their livelihoods.

“We got pigs and a bull to raise as a group… Our income sources have expanded. “We’re seeing some benefits even though the oil hasn’t begun flowing,” he says.

Villages that were formerly known for their corn and cassava crops will soon be transformed into industrial zones. While the compensation has benefited the locals, there are still doubts about whether the interruption to their way of life will be worth it.

Locals are hoping to take advantage of the new work prospects. 16 employment areas, including hospitality, information technology, and security, have been ring-fenced for Ugandans under the legislation that formed the oil sector.

Furthermore, improvements such as a newly paved road will make it easier for fisherman to get their catch to market, while refinery by-products such as fertiliser may increase agricultural productivity.

Fears about white elephants

However, there is a larger debate regarding whether Uganda as a country will gain from the change to greener energy by richer economies.

It took 15 years to get here, and oil is still not certain for another three years, during which time the global picture has transformed.

After the FID was signed this month, a group of more than 50 non-governmental organizations from Uganda and the neighboring Democratic Republic of Congo issued a statement saying the money would have been better spent on cleaner and greener industries rather than “worsening the global climate change impact.”

There is concern that massive infrastructure projects built specifically for the oil business, such as a 3.5-kilometer runway airport, may become white elephants if exports do not take off.

“If the energy transition [away from oil] takes hold, there’s a risk of stranded assets, where some of the investments you make in oil production facilities don’t deliver a satisfactory return to the economy,” adds the author.

However, Proscovia Nabbanja, the Uganda National Oil Company’s chief executive, claims that the project is viable and that “for dollar we invest, we return ten.”

“I don’t think that’s a poor business decision.”

Ms Nabbanja claims that rhetoric from wealthy countries about transitioning away from oil is unjust to countries like Uganda, which should be allowed to benefit from its resources.

“We are dealing with energy poverty in Africa.” The utilization of [wood for fuel] is a major issue for us.

“Every year, we lose 120,000 hectares of forest in Uganda.” As a result, whenever someone mentions energy transition, you must inquire, “Transition from what?”

While conceding that the oil is located in a sensitive ecological zone, Ms Nabbanja claims that measures are being taken to mitigate the damage on the environment.

The environmental harm inflicted by oil in Nigeria serves as a cautionary tale, yet Uganda is betting heavily on its oil.

Oil may be able to assist shift the economy if it can be extracted before the transition away from fossil fuels makes it unprofitable.

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