YEAR IN REVIEW: When EU Parliament threatened to scupper Uganda’s oil sector plans

In 2022, Uganda’s emerging oil sector made international headlines for both wrong and right reasons.

The year started on a positive note, with Uganda, Tanzania and oil companies on Tuesday, 01 February 2022 signing the long awaited Final Investment Decision (FID), paving way for massive investments in Uganda’s oil and gas sector.

International oil companies French Total Energies and China’s Cnooc are the key investors, with the governments of Uganda and Tanzania as the clients and stakeholders.

Speaking at the signing ceremony officiated at by President Museveni and attended by Tanzania Vice President Dr Philip Mpango, who represented President Samia Hassan Suluhu, Eng. Irene Batebe, the Permanent Secretary at the Ministry of Energy, said the FID paves way for Uganda’s oil project to head to the next development and construction phases, and subsequently starting of commercial oil production.

The companies will ship the crude through a 1,445-kilometre pipeline to Tanzania’s Indian Ocean port of Tanga.

The capital expenditure for the 1,443km duct is estimated at $3.55b (shs13trillion), 70 percent of which will be raised from international lenders.   The Ugandan section of the pipeline is about 296km through 10 districts and 25 sub counties, and 172 villages, and affecting at least 4,121 persons.

All seemed to go right until September when the European Union (EU) Parliament passed a resolution calling for a halt on construction of EACOP.

This was preceded by years of civil society resistance, claiming the project is putting nature and people at stake.

In the resolution, the EU Parliament called on the international community to exert pressure on the governments of Uganda and Tanzania to stop the construction of the oil pipeline.

In addition, the EU Parliament urged French company Total Energies to put plans for this mega-project on hold for a year and to look for more environmentally friendly alternatives.

However, this drew an angry response from Kampala, first with Deputy Speaker of Parliament Thomas Tayebwa describing the resolution as an act of economic racism.

“These are projects which were approved by the Parliament of Uganda, the parliament of a sovereign country, and anything to do with challenging their approval is an affront to the independence of this house and we cannot take it lightly,” he said.

TotalEnergies also insisted it has taken steps to reduce the overall scheme’s impact on people and the environment.

“We are doing everything we can to make it an exemplary project in terms of transparency, shared prosperity, economic and social progress, sustainable development, with environmental consideration and respect for human rights,” TotalEnergies said in reaction to the EU parliament resolution.

President Yoweri Museveni also remained bullish about the development continuing as planned.

“I want to assure you that the project shall proceed as stipulated in the contract we have with TotalEnergies and CNOOC [International],” he said.

“Either way, we shall have our oil coming out by 2025 as planned so, the people of Uganda should not worry,” he tweeted.

Tanzanian Energy Minister January Makamba said he had followed up the EU’s allegations of environmental and human rights violations on EACOP, concluding that “Tanzania has adhered to all the procedures to ensure all the rights are protected accordingly”.

He added: “We have paid compensation to those who deserved it; no one was forced to leave their premises or arrested. Also, the overall pipeline route has been designed to minimise environmental and social impacts.”

Museveni recently accused Europe of “brazen double standards” towards Africa in its climate and energy policies.

He lashed out at Europe’s return to coal-fired power plants in the face of the energy crisis triggered by the war in Ukraine while at the same time telling African nations not to use fossil fuels.

“We will not accept one rule for them and another rule for us,” Museveni wrote in a blog published by State House and various other Ugandan media outlets.

“Europe’s failure to meet its climate goals should not be Africa’s problem,” he added.

However, the African, Caribbean and Pacific-European Union (ACP-EU) Joint Parliamentary Assembly, which brings together elected MPs from the African, Caribbean and Pacific (ACP) states and the European Union, okayed the pipeline project.

Mr Tayebwa, who led a Ugandan delegation to the three-day assembly in Maputo, Mozambique, described the move as a big win for Uganda.

Also, at the end of September, the first consignment of parts for the oil drilling rig dubbed LR8001 arrived at the Kingfisher oil field in Kikuube District at the parallels of Lake Albert, adding impetus to ongoing plans to start commercial oil production in the last quarter of 2025.

The Kingfisher oil field is part of the Kingfisher Field Development Area that straddles Kikuube and Hoima districts in mid-western Uganda, operated by Cnooc Uganda Ltd.

The remaining rig parts were hauled daily for three weeks by 18 container trucks from Mombasa port to Malaba en route to mid-western Uganda.

The complete set of the rig equipment was expected to be assembled and installed by December 15 to allow test drilling.

Total Energies EP’s first drilling rig to be employed at the company’s Tilenga oil project that straddles Nwoya and Buliisa district also underwent and passed endurance tests recently.

The Tilenga project will employ five rigs; three north of the River Nile inside the Murchison Falls National Park, and two across the Nile in Buliisa.