Uganda’s energy sector is on the precipice of a transformation with the accelerated development of the Lake Albert Development – comprising the Kingfisher and Tilenga oilfields and the East African Crude Oil Pipeline (EACOP).
Having secured a final investment decision for the development earlier this year, progress is being made and a new era of energy security and economic growth is in sight for both the country and the entire East African region.
Energy Capital & Power spoke with Proscovia Nabbanja, CEO of the Uganda National Oil Company (UNOC), about the development and the benefits it will bring for the continent.
What does UNOC’s 2022 and 2023 agenda look like?
Having achieved Final Investment Decision (FID) for the upstream projects and the East African Crude Oil Pipeline, earlier this year, our agenda is to focus on the delivery of these projects. Achievement of FID paved the way for project execution. Many tier one contractors have been awarded and we have started executing the projects. We are targeting these projects to be ready for first oil in 2025 so it is critical for us to focus on implementation to achieve the timelines.
How has the NOC managed to remain resilient with the development despite the ongoing opposition by environmentalists to the pipeline’s construction?
The opposition from activists may be coming from the lack of facts from their side. We are engaging the different stakeholders to make them understand that actually, as we implement the projects, we have put environmental considerations at the forefront of the planning, we are using international standards and that contingencies have been provided for. The environmental impact assessments were done to a granular detail and there were public disclosures. Project Affected Persons are being compensated in conformity to international standards including programs for livelihood restoration. It is critical for us that we bring such information to the different stakeholders so that they understand that we have done a lot of initiatives around project planning, cognizant of the need to resettle project affected persons in the right way, and cognizant of the fact that we need to consider the environmental protection as we implement the projects.
That is one side of the conversation; The second is to show the socioeconomic benefits of the projects. We are not just delivering the project for purposes of profit. There is a greater strategic view of the projects. For example, the construction of EACOP has direct linkages to the upstream developments. Both EACOP and Upstream pave the way for the refinery development which is a big contributor to the industrialization agenda of the country including value addition and trickle down effects to other sectors of the economy. The refinery development also paves way for security of supply of petroleum products, reducing the import bill, opening of forward markets among others. We shouldn’t forget that the integrated projects also pave way for direct, indirect and induced jobs, technology and skills transfer, localization of contracts and so many other benefits. If we stop one project, there is a ripple effect on all the other envisaged benefits. We have an obligation to deliver these socioeconomic benefits to our country and transform our economy. We will do it in a sustainable way with all due consideration to environmental protection.
What role has public-private sector collaboration played in the development of the EACOP and any other projects currently in the pipeline?
We are in partnership with the private sector or International Oil companies including TotalEnergies and the China National Oil Corporation across the different projects. The role of the private sector is that they bring the technical skills, the technology and the financing as well. For us, it is about strategic collaboration, and by being part of the partnership, we see what the industry wants from a business perspective; know our national development goals which we won’t shy away from; know what the legal and regulatory framework requires; and know what Ugandans want. Being alongside the private sector in these developments gives us an opportunity to ride on the back of very strong and reputable companies that use stringent measures that conform with international standards and are committed to delivering what shareholders and stakeholders want to see in terms of climate protection and environmental stewardship as the projects are delivered.
Can we expect collaboration between UNOC and other African NOCs in the future?
One of the key strategic pillars we have as a National Oil Company (NOC) is partnering strategically. Strategic partnerships are critical for us because we need to attract financing, technology and skills to implement these capital-intensive projects. So, whether it is going to be an international oil company (IOC) or an NOC like ourselves, it is a question of who is interested in investing with us and has an aligned vision. The beauty about exploring partnerships with NOCs is that there is longevity symmetry because I believe most of the NOCs have strategic obligations that are aligned with the national development agendas of their countries. We are open. If there is an NOC who wants to work with us, we will explore opportunities. Additionally, we are looking for partnerships to build our capacity especially with companies that understand our strategic direction as an NOC. We want to build capacity, share experience, technology and much more. I also believe a partnership or platform for collaboration for African NOCs is a good ground to have targeted initiatives on how to drive the industrialization agenda, reduce energy poverty, provide energy security in Africa, open up markets and address issues of financing of energy infrastructure.
