Tag: EACOP

CNOOC Social Responsibility Projects Changing Lives of Ugandans in Albertine Area

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By Herbert Kamoga
Standing on the escarpment which is over 400 meters above the ground on the remote western edge of Uganda, you see the land precipitously dropping down into the western arm of the great rift valley to reveal the immense expanse of Lake Albert and beyond the blue mountains of the Democratic Republic of Congo.

The magnificent view reveals the Kingfisher Development Area (KFDA) which is located in Buhuka Parish, Kyangwali Sub County in Kikuube district being developed by China’s China National Offshore Oil Corporation (CNOOC) Uganda Ltd.

Before Uganda discovered oil in the Albertine Graben in 2006, and has since embarked on establishing effective management procedures to promote its growth and development for the country, this area was previously dominated by fishermen from the Ugandan and DRC sides.

Being in the rift valley area, this was like an island which could not be easily accessible and the dwellers could neither communicate nor trade with their neighbors across the escarpment which is about 2km away since there was no road, and climbing the incline was really a very hard task especially to elderly, women and children.

Over the weekend, with a group of researchers and journalists, we visited the area. According to Dismus Babihamaiso, the LCI chairperson of Nsonga A village, people in the are lacked essential social, health and economic services. There was no any health facility where they could access services and whoever fell sick, and did not get cure from the local herbs could die. The common and major cause of death was bilharzia which Babihamaiso attributed to drinking contaminated lake waters and that malaria was so rampant due to a many breeding areas for mosquitoes. The problem of lack of clean water was sorted thanks to CNOOC’s Buhuka water scheme which is supplying over 10,000 people in the area. The project was constructed under CNOOC’s social responsibility program as a contribution to locals.

Before the construction of the road, to save lives of their beloved ones, residents could make wooden stretchers and hire muscular men to lift the patients climbing the escarpment, to the eastern side where the health facility was. However, many expectant mothers could die, before the muscular men overturned the escarpment, Babihamaiso narrated to us.

The other access route was through Sebagoro landing site, “We could collect money and hire a boat to transport the patients to Sebagoro where they could find other means, to take them to the health center. But there is a distance of about 25 kilo meters, whenever there were strong winds on the lake, the boats could not move, and that was a challenge to expectant mothers who needs urgent attention” another resident Asuman Okello emphasized.

However, things are different now thanks to CNOOC.  After being awarded a production license for the Kingfisher Oil Field in 2013, CNOOC started the construction of a 10km road from down the valley through Buhuka hill to Ikamiro village up the escarpment to facilitate the development of the oil field. “By the time we started operating (from) here, we were using the lake to access this place, we used to move on the water for one and half hours, from a place called Mbegu. All the materials / inputs that would be required to support the project, they would come through water from Mbegu up to here” Zakalia Lubega, the Head of Corporate Affairs CNOOC Uganda told us.

“If the community needed anything up the escarpment, they would use a small footpath through this hill, and it used to be about 1.9km from down going up, but one would use almost two hours to walk that short distance, and that was so because there was no any motorable access to this area” Zakalia Lube added.

The road that opened up opportunities for the community was was commissioned in 2016. Lubega says people can now use it to transport merchandize to and from anywhere, before adding that “Businesses including for Bodabodas and other transporters are now thriving. The cost of living was so high for the community because the merchandize would get to the valley at a very high cost, for example a bottle of mineral water which cost only 500 Uganda shilling would be sold at Ug. shs. 2000”

The road also opened market whereby the fishing community can now easily sell their fish to the rest of Uganda especially Kampala which offers the best market for fish in Uganda. This in the long run is has contributed to improved living conditions of people. If well analysed, even before actual production of oil which is expected to start in 2025, residents in Albertine area are already enjoying fruits of Uganda’s young oil sector.

CNOOC Uganda Ltd, which is a subsidiary of the China National Offshore Oil Company Ltd, China’s largest producer of offshore crude oil and natural gas was awarded the production license of Kingfisher Development Area in 2013, and is currently developing the oil field facilities. These include; a central processing facility with a capacity of 40.000 barrels of oil per day, four well pads holding 31 wells (11 injectors and 20 producers), 19km of flowlines to connect the field to the CPF, a forty six (46)km 12 inch feeder pipeline that will move crude from the CPF in Buhuka to the export hub and refinery at Kabale in Hoima District and a lake water abstraction station.

And the cost of developing this field to be able to pump first oil is $3bn (shs. 10 trillion) and this shows an immense commitment by China to support Uganda’s development. CNOOC holds about 28.33% of the shares in the oil project alongside TotalEnergies SE (56.67%) and UNOC (Uganda National Oil Company), 15%.

It is no surprise that President Yoweri Museveni while at celebrations marking the 70th anniversary of the founding of the People’s Republic of China at African Hotel in Kampala where he was chief guest, commended the Government of China for supporting Uganda in infrastructure development including railway transport, electricity generation, road construction and telecommunications, among others.

“When I was in China recently, I signed an MoU with the Chinese President to intensify the relationship between Uganda and China as they are Uganda’s genuine friends,” president Museveni noted.

Museveni commended the Communist Party and Government of China for not only fighting colonialism, contributing to the liberation of African countries but also for helping in the improvement of the economies of Africa and supporting the continent’s prosperity through trade in an effort to assist Africa build a strong economic base.

Western Uganda has approximately 6.5 billion barrels of oil reserves, with at least 1.4 billion estimated to be economically recoverable. After announcing the Final Investment Decision (FID) in February this year, Uganda expects to start producing oil in 2025.

Herbert Kamoga is a freelance journalist and a senior fellow at Development Watch Centre

CNOOC Is Still Uganda’s Reliable Energy Partner Amidst EACOP Controversy

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By Moshi Israel.

In International Relations, a country’s political and economic success largely depends on the friends or enemies that country makes. Uganda is no exception to this rule and so far, the Pearl of Africa’s closeness to China is proving to be a wise decision. Time as usual shall be the ultimate judge of this relationship. As President Museveni has occasionally hinted, the oil and gas sector is vital for Uganda’s long-term economic development strategy. The discovery of oil is not an event any country can simply ignore. It represents many opportunities as well as potential dangers. The most significant step is for Uganda to be ready for all these eventualities by making well-meaning strategic partners. China, through China National Offshore Oil Cooperation is likely to be such a partner in the energy sector for Uganda, (CNOOC).

Many Ugandans were alarmed and taken aback when the European Parliament passed a resolution on 14th September compelling Uganda and Tanzania alongside their partner TotalEnergies SE, to delay development of the East African Crude Oil Pipeline (EACOP) for at least a year citing human rights and Environment concerns. Whereas human rights and a clean environment must be top priority for every government around the world, the irony in this resolution cannot pass without notice. One needs to only check the list of countries from which the European Union imports its crude oil, solid fossil fuels (coal) and gas to assess the sincerity of the parliament’s resolution. Furthermore, it is important to remember that EACOP represents less than 0.1 percent of the operation global pipeline network of 1.18 million kilometers.

A closer look at the Kingfisher project by CNOOC, shows that Uganda is still on the right path to meeting targets with regards to environmental concerns, human rights through proper compensation and resettlement of persons affected by the oil project. CNOOC holds around 28.33% of the shares in the oil project alongside TotalEnergies SE (56.67%) and UNOC (Uganda National Oil Company), 15%.

In 2025, EACOP is expected to be online and the offloading of the first ship of oil is expected in the same year. CNOOC announced that it would invest USD1.6 billion in the kingfisher project with about $400m going to local providers. The Final Investment Decision (FID) was approved by CNOOC on 4th November, 2021 and on 1st February 2022, Uganda government announced the FDI. The Kingfisher oil field construction kicked off on the 11th of February 2022 and the oil field is expected to be ready for startup by the end of 2024. The main facilities on the kingfisher project are to include; 4 well pads, one Central Processing Facility (CPF), water intake station. Supply base, permanent camp, temporary camp, safety check station, 47.6km feeder line to Kabaale including a high voltage cable plus road and other infrastructure.

As a researcher, over the weekend I visited CNOOC’s Kingfisher oil field project and from analytical perspective, CNOOC is doing a commendable job. The project has a plan for impact mitigation activities which involves stakeholder engagement activities. This is important because the plan which is already in practice seeks to quell doubts concerning the project by extending field visits to operation areas by key stakeholder groups such as special interests at all levels from national to the village level.

Additionally, CNOOC has an environment work plan designed to mitigate environmental risks caused by the project. The company completed an Environmental and Social Impact Assessment (ESIA) approval for a High Voltage Test Lab and feeder line ESIA in June, this year. The company also has an ESIA approval for Drilling Buffer Yard as of 14th July 2022. Also, CNOOC completed ESIA for shoreline protection system and jetty structure on 13th, July 2022. In August, the company rolled out the Monitoring and compliance register and a finalised legal compliance MS.

In context of jobs creation, the kingfisher project is currently employing over 2,715 Ugandans, which is over 78% of the total personnel. 280 total workers and 149 Ugandan nationals are directly employed by CNOOC and 2,436 by contractors. 524 of all the employees are from the local communities and there are 42 local subcontractors. These numbers are expected to increase as the project progresses.

CNOOC has also undertaken National Content activities aimed at benefiting Ugandans. These include supplier development engagements, enterprise development training programs that have trained over 150 small enterprises (SMEs) from the Albertine and Kampala regions with an additional 200 SMEs to be trained this year. The project has also implemented a community supplier development program to help farmers and small businesses to supply food and other items to the project. CNOOC has also trained and licensed 140 heavy goods vehicle drivers including a number of women. The project has facilitated training of over 126 trainers under its train the trainer program in Kichwamba and other vocational training institutes. Additionally, 230 welders have been trained and internationally certified in 2G and 6G coded welding.

When one takes a walk-through Kingfisher, it is easy to notice standard houses constructed by CNOOC for the locals who opted for this option instead of taking cash in resettlement money. The resettlement houses are up to standard with a kitchen, latrines and a tank collecting and supplying piped water purified by the company from a nearby stream.

In conclusion, the kingfisher project by CNOOC is a droplet of hope in an ocean of controversies surrounding the oil projects in Uganda. It is evidence that somethings can be done right. CNOOC is largely representative of Uganda’s partnership with China based on mutual respect and benefit for years to come. It is up to the Ugandan people and Government to make the oil project a blessing or a curse for the country. CNOOC is doing its part, it is up to the government of Uganda in collaboration with Ugandans and other stakeholders, to ensure that human rights are respected, the environment is protected and corruption not tolerated so as to alleviate some concerns from the international community.

It is also the responsibility of our international partners to make decisions based on facts and through research before taking a path that would destroy the livelihoods and shatter the dreams of millions of Ugandans, Tanzanians and East Africans likely to benefit directly or indirectly from the oil project.

Moshi Israel is a Senior Research Fellow at Sino-Uganda Research Centre.

SNOOC is Doing a Commendable Work, EACOP Could be Turning Point to Uganda’s Economy

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It is said that Kampala never sleeps, “the party capital of East Africa” any revealers call the city. But walking across the neon lit bar strips of Acacia and upper Kololo or the music blaring Bandali rise one can almost forget that this was unthinkable two decades ago. The neon lights would be flickering due to irregular electricity supply, the sounds of music blaring over the streets would’ve been drowned by coughing generators one spasm away from the dark abyss of load-shedding. Uganda like many other African countries was facing an energy crisis where the industrial and domestic need for electricity far outpaced the ready supply. To address this the government decides to construct the famous Owen Falls Dam at Bujagali.

This project initially funded by the world bank soon quipped the interest of foreign “environmental and climate” activists who pens blazing launched a scathing attack on the project lobbying both local leaders and politicians as well as unleashing a tirade of international pressure forcing the original contractor to (at great cost) pull out of the arrangement. Eventually the Owen Falls Dam was completed at a significantly greater cost to the Ugandan taxpayer and a less favorable Private-Public Partnership agreement than was in place earlier. However, the neon lights on Kanjokya street every night are a reminder that the Bujagali dam project is paying off.

Why do I bring this up now? For over a year now the East African Crude Oil Pipeline has for over a year now been under attack from a similar ilk of foreign “environmental crusaders” who are using all tools at their disposal to stall and stop the project. The latest weapon in their arsenal is a resolution by the European Parliament to compel Uganda, Total Energies and the China National Offshore Oil Company to stall the pipeline project by at least a year as they carry out among other things a secondary impact assessment study.

Besides the fact that it feels quite tone deaf that at a time when the shifting power dynamics within the Commonwealth establishment have reinvigorated the discussion on colonialism and neo-colonialism a group of (largely) former colonial powers comes together to pass resolutions “compelling” African countries to do their bidding, it seems objectively bordering on double standards because the same nations are urging the OPEC organization to increase its gas output to make up for the Russian supply irregularities caused by the conflict in Ukraine. A little closer to home perhaps the European Parliament may be interested in debating the British oil companies fracking within the North East Sea and what impact that could have on the environment as well as Brussels backtracking on coal reduction targets.

Admittedly, there is need for African countries to watch their Carbon footprint especially when it comes to fossil fuels. What many critics decline to mention is that Africa’s contribution as a whole to the global carbon footprint is close to negligible. As International Energy Agency’s executive director Fatih Birol noted; “if we make a list of the top 500 things, we need to do to be in line with our climate targets, what Africa does with its gas does not make that list.” Truly when one looks at the world’s largest emitters of greenhouse gas Uganda and Tanzania are no where close to the biggest threats to the Sustainable Green energy goals.

Most importantly, European countries should pick a leaf from the Chinese development assistance policies which are infrastructure oriented and non interventionist rather than dictating the course of sovereign nations. In a glaring contrast, while European “climate czar” Frans Timmermans and European members of Parliament debate the energy policies of the country the Chinese ambassador to Uganda H.E Zhang Lizhong was over the weekend at the Kingfisher oil field in Western Uganda to oversee the tremendous work of the CNOOC in setting up oil infrastructure that will be used in the project.

In a viral picture he is seen with a Ugandan female oil engineer, Kahwa Lucy formerly on Chinese scholarship now working at the oil site, a diplomacy masterclass revealing China’s commitment to infrastructure capacity building in the country.

During the same tour, the ambassador witnessed arrival of more components of drilling rigs raising hopes that Uganda’s first oil is about to be seen. With CNOOC’s president Chen Zhuobiao, Ambassador Zhang Lizhong assured researchers and journalists who visited the site that all environmental related concerns raised by EU parliament had been addressed since they had been raised in environmental impact assessment studies. The ambassador also noted that it is unacceptable EU to use claims of environment and human rights in to delay important national development project.

In the long run, it is very possible that Uganda’s oil fortunes can be turned around to fuel a greener economy, it has been done before (albeit on a smaller scale) in countries like Egypt and more recently the United Arab Emirates. Currently the logging of forests for firewood and charcoal burning may pose a more immediate threat to the environment than an oil pipeline built to match global standards of environmental sustainability.

Anyway, tonight, because of the dauntless tireless turbines churning noisily in Bujagali, a few million lights are flickering in the entertainment Capital of East Africa, countless beacons of hope in the “dark content”. Perhaps the oil pipeline may just be the artery that pumps life into the Ugandan economy and awakens the “sleeping continent”.

Shemei Ndawula, is a Research Fellow at Development Watch Centre.

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