The irreversible march to first oil

The year 2022 was a critical year in the journey to Uganda becoming an oil producer. On February 2,2022 the oil companies Total Energies, CNOCC and the Uganda National Oil Company (UNOC) announced that they had taken a Final Investment Decision.

An oil and gas development has  a life cycle. It starts with exploration and appraisal of oil wells to establish if a country has oil that can  be exploited in commercial quantities. Before the oil can be pumped out of the ground the investors conduct a number of studies including environmental studies and proper commercial studies. When they are satisfied that the project is worth it they take a final investment decision to develop the oil fields. 

In Uganda this was a lengthy and elaborate process which led to FID. The decision therefore to take FID in February of this year set the Ugandan industry on an irreversible journey to first oil.

The country during exploration had made 21 oil and gas discoveries, had an 88 per cent  drilling success rate (compared to a global average of 25 per cent; had discovered 6.5b barrels of oil, of which only 1.5b barrels are recoverable; had issued nine production licences to CNOOC and TotalEnergies. These developments were to be done in two areas code named Tilenga and Kingfisher.

The Tilenga oil fields are located in Buliisa and Nwoya districts. The Tilenga fields will produces an average of 190,000 barrels of oil per day while Kingfisher which is in Kikube District, will produce 60,000 barrels of oil per day. 

The country will also develop a 60,000 barrels of oil a day refinery and 1,443km crude oil export pipeline called EACOP to transport crude oil to the Tanzanian port of Tanga. 

Uganda’s high value project is to be done in the safest way possible. Already the country has outlawed the burning of any associated gas, which is known as gas flaring and the field development plans have taken into account the latest technology to ensure it remains a low carbon project.

The oil majors are committed to ensuring we emit 13kg of Carbon per barrel of oil as opposed to the global average of 33kg of carbon per barrel of oil. UNOC has committed to plant 40 million trees with assistance from private sector players and civil society actors. The project will also produce Liquified Petroleum Gas (LPG) which can be used in gas cylinders for cooking. This will help in the fight against deforestation, which is by far the largest source of Uganda’s carbon emissions. It is an all round good project. The benefits of a refinery for example are too numerous to list here and will form the basis of future articles. 

The decision therefore to unlock this complex and yet incredible opportunity for Uganda was a milestone in the development of the sector. We have seen this decision move from mere paper to serious action with acquisition of land, the early works for the well pads, the assembly and importation of state of the art oil rigs and the completion of almost 1,000km of tar roads. 

We also saw this year a robust campaign against this project from Western NGOs, Western politicians and a few of their satellite organisations in Uganda. We even had the project debated in the EU Parliament which asked that it be delayed for a year on account of a number of fictitious and imaginary allegations from the MPs including claims about water for 40 million people presumably from 230 imaginary rivers and also based on wild concerns about endangered hippos.  The self righteous attack on EACOP would have embarrassed a Pharisee.

As Western Politicians asked us to save mankind by conserving poverty they embarked in their countries on much bigger oil projects. We saw hundreds of licences being issued in the North Sea by the UK and Norway; we saw coal being used in Germany; we saw US talk about 9,000 oil licences that had been issued and we saw the EU Commission fund pipelines. Those preaching water were drinking wine. 

Fortunately the country refused to yield to this pressure. The coming year represents a significant and incredible opportunity to soldier on with a project that has the incredible potential to spur growth in this economy. We must not for even one second stop our irreversible march to Tanga. 

The writer is an advocate and partner at Kampala Associated Advocates 

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