Tag: Oil

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

The King Fisher Project is a textbook of Example Of A Mutually Beneficial Partnership

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In 2016, the diplomatic relations between China and Uganda assumed a new mile stone when the two nations agreed to elevate their relations to the level of comprehensive co-operation partnership. This meant new heights of co-operation through harmonizing foreign and domestic policies to achieve social- economic transformation and building a community with a shared future in form of a win-win co-operation strategy as a common goal by both states. Through the king fisher oil project in the Albert region, the government of Uganda, contracted the China National Offshore Oil Corporation (CNOOC) to spearhead the construction of the site and subsequent oil drilling in the area.

The king fisher project is located in Kikuube and Hoima Districts in the valleys of Buhuuka parish along lake Albert. The first challenge CNOOC inherited was the inaccessibility of the Kingfisher area, surrounded by steep mountains and rocks. The only mode of access was by air or sea. Locals navigated the hostile lands by walking long distances of about 3 hours to reach neighboring villages. However, CNOOC in collaboration with Uganda government helped to construct a standard road through the rocky hills and mountains. This eased access for both company workers and the locals to their respective destinations.

Cross border trade between Uganda and Congo and economic activity within the native local community has also improved since residents can now move to Hoima city more conveniently. The road has also made it possible for cargo to be transported to the landing site designated for neighbouring Congo hence widening Uganda’s exportation capabilities and earning the government revenue. CNOOC directly employs about 280 Ugandans which is about 78 percent of the company’s labour force. Additionally, CNOOC contracts 42 other local contractor companies to handle site development projects which also employ about 1,334 other Ugandans to the project. Ugandan experts and engineers have gained valuable training from CNOOC which is preparing them in the long-term to manage future oil projects.

CNOOC has aided and supported life transforming projects and workshops for the affected communities. These include live stock and crop development program to train famers better farming mechanisms as a surplus to fishing. This has helped alleviate the problems of fish hunting that risk depleting the fish resource. Under the live stock and crop development program, the communities have been enlightened about better ways of farming and a total of 315 affected people engaged in the program. The parish selected 9 farmers that received 9 boram bulls, 10 poultry famer’s groups received 500 chicken each, as well as 9 others that received 5 exotic piglets and boer buck goats. I also learnt that the empowered poultry farmers now supply eggs and chicken to king fishers’ welfare needs department hence earning income that has improved economic status.

CNOOC has also opened up skill workshops to the affected population in Kikuube district. They include Manual skills training fully funded by CNOOC. Many Ugandans have attained welding skills at munteme vocational training Institute and they will be deployed at the construction of the East African crude oil pipeline (EACOP). Others in Hoima city in collaboration with Bunyoro Kingdom have been trained to operate heavy cargo vehicles and a large number have been added to that program and are currently being trained.

The Buhuuka water project scheme was fully funded by CNOOC has transformed the lives of the native affected communities. The water scheme currently supplies local residents with purified and clean water. The water is piped and delivered to the locals. Some of the locals who opted for fully furnished houses instead of cash compensation as resettlement fees, can readily access water through water tanks connected to their houses. The water scheme has alleviated water pollution and its related effects of diseases. Before, the CNOOC led water scheme, the locals were constantly hit by the deadly Bilhazia which seems to have completely been eradicated for now. The community also was availed a health center that extends affordable health services to them. The clean and purified water project is currently being managed by the locals who have been trained by CNOOC engineers on the technicalities of maintaining a complex water scheme.

To conclude, the Kingfisher project run by CNOOC is to a large extent a success story for the collaboration between the Uganda and China peoples. It is a testament to the power of mutual friendship for mutual benefit and underlines China’s commitment to working with developing countries to attain sustainable development and build a community of common prosperity and shared future and prosperity for mankind.

 

Balongoofu Daniel, Research Fellow 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.

Heart-to-heart Cooperation: CNOOC’s housing project for residents in oil reach areas deserves Kudos

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After the government of Republic of Uganda announced that the country had discovered commercially viable oil deposits in the Albertine basin, many people especially in mid-western districts of Buliisa, Hoima and Kikuube where oil deposits were discovered welcomed the news with excitement. The government of Uganda also noted that the discovery of oil was a blessing stressing that many Ugandans would directly and indirectly benefit from discovered oil projecting that Uganda will earn between $2 billion and $3 billion annually once commercial oil production begins.

Due to speculation, cases and claims of land grabbing in the region were registered with some reports alleging people were being displaced from their land to pave way for oil production as was the case in Hoima where many were displaced to construct an oil waste plant. This resulted into fears among some locals fearing they may miss out compensation in case their land was selected to be used.

Today, even before commercial oil production, residents are already enjoying fruits of oil production activities, thanks to the companies involved in oil production projects.

For example, on top of compensating locals whose land fall in areas China National Offshore Oil Corporation or CNOOC is meant to drill oil or operate from there, the company has completed more than 56 modern house units with water tanks and solar power which will be handed to locals. Also, to benefit are communities, the company has separately constructed two modern toilets for the church and a school. With no doubt, the beneficiaries of the said projects in sub counties of Kabwoya, Kyangwali and Buseruka in Kikuube and Hoima district respectively is evidence that once companies that identify with locals’ needs working heart-to-heart, challenges that come with mega developments projects, in this context so-called oil course can be avoided as both locals and the nation gain from the project.

Arguably, for developmental projects to benefit the wider community or nation in this case, such development should start by benefiting the locals. In oil exploration project from Uganda’s perspective, CNOOC has scored and should be commended for not displacing and leaving local citizens in misery promising better in the “near future.”  As many waits for benefits that will come with oil production, at least those affected by the production preparations have where to stay comfortably with their families, thanks to CNOOC’s Heart-to-heart Cooperation.

In terms of employment opportunities, firms exploring Uganda’s oil are also fairly employing Ugandans. For example, in China’s CNOOC, Ugandan employees make up to 78 percent of the company’s total employees. Even in key sectors such as engineering and construction activities, the company is employing more Ugandans (581) which accounts to over 81 percent. From the above, whether CNOOC is employing more Ugandans as a way of complying with government’s policy of employing more citizens, CNOOC deserves kudos especially for putting Ugandans first in their work.

Another area that is always ignored in oil exploration activities is addressing environmental concerns. While in Kyabusambu, Kikuube district where we were collecting data for our study, we found CNOOC had mobilised their employees for a community clean up exercise and later donated cleaning equipments to residents. Beyond the usually social responsibility stunt, CNOOC involving community members in cleaning their community and collecting and removing plastic wastes from lake showers is a good gesture that should be emulated since it goes beyond social responsibility to showing concerns over our environment. Caring for environment is very key considering the fact that it helps to mitigates any environmental concern with possibility of compromising and affecting future generation needs.

Apart from direct early benefits of oil exploration to residents in Albertine region, driving through the region – from Hoima, to Buliisa and Kikuube, it is evident that Uganda is destined for big and good things. Just two months after the Final investment decision (FID) was signed which experts explain marked the unlocking a capital investment of $10b in Uganda’s oil related contracts, driving through the now famous rift valley located in Kikuube district as you head to the area with more oil fields – Kingfisher which is operated by China’s CNOOC shows how promising Uganda’s future will be.

At Kingfisher the feeling is clear and it is evident the place has changed and development is on high speed with drills and construction of mega oil well pads (a well pad is a graded area which is used in oil drilling.) One can only imagine and wait with excitement wondering how the place will look upon completion. CNOOC set 2023 as target period for completion of well pads and today, work stands at 11%.

Allawi Ssemanda and Katende Arnold Ricky are research Fellows at Development Watch Centre.

 

 

 

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