Past, present and future of Uganda’s oil

Oil & Gas

This week, Boris Johnson spoke to the UK Parliament for the last time as Prime Minister. Mr Johnson, in his closing remarks, advised that people must, “Focus on the road ahead but always remember to check the rear view mirror.”

This, by any standard, is sound advice. In the past, this column has tried to focus on the road ahead with regard to the oil and gas industry. The purpose has been clear; to show that we have no other option outside of developing our resources. Those who are bitterly opposed to us developing these resources are not really interested in preserving the environment but rather in conserving poverty.

In a continent of more than one billion people, that uses less electricity than Spain, we don’t have energy to power our hospitals, to light our homes or to power our industries. We must correct the injustice of energy poverty, this is the mission of our generation.

There are people who are seemingly worried about whether Uganda has the technical know-how and managerial competence to manage the oil industry, and others who believe that we don’t have this skill. Well, let’s take a look in the rear view mirror, to look back on how Uganda has managed its oil resource so far.

The earliest reference to oil in Uganda was in reference to an oil seepage near Kibiro on the shores of Lake Albert in 1920, which was known to the indigenous people who lived in the area.

More than a century later, on February 2, 2022, the Final Investment Decision was announced. In a speech, President Museveni said he had been approached in 1986 by Shell BP who asked him to license the oil blocks to them.  He discovered that there was no one in government who could negotiate with the oil companies and so, he put the discussions on hold and sent a number of senior officials to study all things oil in universities abroad.

He also issued policy direction for the sector on capacity building, data acquisition and promotion, and monitoring of compliance of license companies. When government representatives returned from their studies, Shell BP had lost interest in the project. Nonetheless, government continued to train and deploy a number of public officers who studied the data and understood the oil basin very well.

Uganda has also had its fair share of disputes with oil companies about capital gains tax, the need for a refinery and its size, and the content of production licenses. Serious work and tough negotiations have gone into this project. Currently, Total Energies and CNOOC are licensed to produce oil. These companies have the financial muscle and the technical expertise to deliver a world-class project. They have partnered with the state-owned Uganda National Oil Company (UNOC) to deliver our first barrel of oil.

This is against the tide of outlandish claims about EACOP. Claims that the route tears through 230 rivers, passes through Lake Victoria, pollutes the Lake Victoria basin or displaces 110,000 people that are simply false. The pipeline route is the result of careful study.

However, in some of these criticisms it is becoming clear that opponents of this project have resolved not to let facts stand in the way of their argument. It took Uganda almost four years to choose the pipeline route and almost four years to conduct an environmental assessment of the route which included open public consultations and excellent feedback and suggestions from local and international NGOs and conservationists.

This generation must focus on the road ahead and take a look in the rear view mirror, for only then can we understand our mission and fulfil it. There is no doubt that even before first oil, we have seen the benefits of skilled and well led public officials working to make this project beneficial to Ugandans.

And, at least for now, we have a group of people trying to meet this historical mission in both the public and private sector. As political philosopher Frantz Fanon once said, “Each generation must, out of relative obscurity, discover its mission, fulfil it, or betray it.”

The writer is an advocate and partner at Kampala Associated Advocates

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