Humans displaced, habitats disturbed - but Uganda pushes ahead with oil pipeline

For millions of Ugandans earning only $1,000 a year, the prospect of being dragged out of poverty by the world’s largest heated oil pipeline is enticing.

But an understandable unease surrounds a project, which has the potential to pump 240,000 barrels of oil a day, 3 kilometres deep from under the red soil, to transform the fortunes of this landlocked East African nation.

The $10 billion (Dh36 billion) project is a collaboration between TotalEnergies EP Uganda (TotalEnergies), China National Offshore Oil Corporation Uganda Limited (CNOOC) and the Uganda National Oil Company (Unoc).

Uganda has faced up to a nation-changing dilemma. While the pipeline has already led to thousands in its path being shifted from their homes and threatens to disturb almost 2,000 square kilometres of protected wildlife habitats, there is the potential to change the lives of millions living in rural poverty and double the national GDP to about $80 billion.

It is still at least a year before oil begins to flow from the two huge production sites at Kingfisher and Tilanga, which has already brought some benefits to communities but sparked outcry from activists over its impact on the environment.

“As a government, without doubt, we must continue decarbonising across the board,” Irene Batebe, permanent secretary of Uganda’s Ministry of Energy, told The National.

“And as a country, we are determined to become independent in terms of our energy security but also resilient when looking for home-grown solutions so we can handle the global shocks like we saw arising from the Russia Ukraine war.

“Even with the commitment we are undertaking, we believe the oil and gas sector can still coexist with our plans for renewable energy."

Renewable energy

Hydro power stations are scattered across Uganda, from the rapids of the White Nile at Jinja to Murchison Falls National Park and the banks of Lake Albert, generating 80 per cent of the country's power supply.

Rangers inside the stunning Murchison Falls said while animal movements had been tracked as part of the oil pipeline’s environmental risk study, concerns remained over drilling in such a sensitive, richly biodiverse region.

Environmental-impact assessments have been branded inadequate or vague by critics, while the region’s seismic activity has left some wondering what could happen to the scores of oil wells planned to serve the vast East African Crude Oil Pipeline if an earthquake strikes.

Tanzania stands to be the country most affected by the 1,400km pipeline, that will be 24 inches wide and run two metres underground, as infrastructure stretches from the Ugandan oil city of Hoima close to Lake Albert, to the Indian Ocean port of Tanga.

Development contracts worth more than $7 billion have already been handed out, a quarter to Ugandan companies.

But because of the negative association with fossil fuels, many international banks and insurers have distanced themselves from financing the project.

Will land owners count the cost?

More than 3,550 households have already been displaced by the project, with 95 per cent of disputes resolved, project representatives say.

Dickens Kamugisha, chief executive for Africa Institute for Energy Governance, said some land owners were paid below current market value.

“From the start, the government and companies have been telling communities the discovery of oil is going to make life better, you will get jobs, you will get hospitals, you will get water, you will get education,” he said.

“Since 2006, the biggest victims have been people owning land where oil activities are taking place.

"Nowhere in that oil region have people been compensated on time.

"Many had no option to say 'we can't take this compensation'.

"If you assess in 2019 and you pay in 2023, then prices have changed, the value of money has changed."

A spate of land-grabbing from opportunists hoping to cash in on the land's rising value since the oil discovery has distorted prices.

Agenonga William Oluwonga, 53, was given 60 million shillings ($16,000) in cash for four acres of land and has moved one kilometre from his home to make way for the 2,900 acre Tilanga Industrial Area development.

He has also been given a new breed of supersized goat to rear, cassava crops and fruit trees to provide a sustainable farming income.

“We were worried we would get trouble because our land has been taken by the oil and gas,” said Mr Oluwonga, who has two wives and 25 children, five of school age.

“I still have concerns as we live so close to the oil facility.

“I fear it will make so much noise I may fail to concentrate and enjoy living in my area, or that the smoke it produces may affect my welfare.

“These concerns are shared by everybody in the community.”

Buffer zone

A buffer zone has been created between communities and oil plants.

Reliable electricity supply and roads in and out of communities are improvements that may not have been realised without oil. Mr Oluwonga can also now afford to send his younger children to school.

“In my view, the future looks bright because I can see there is development here now,” he said.

“We never used to have electricity here and we have good roads, too.”

A key tenet of the project is to encourage rural communities to take up Liquid Petroleum Gas to cook and heat homes, rather than the biomass currently used.

Charcoal and wood felled from the thousands of hectares of forest have fuelled this nation for centuries.

It has created a double environmental blow of adding carbon to the atmosphere, while losing giant areas of forest that can sequester carbon from the air.

Rainforests such as the 17,700 hectare protected woodland reserve of Kakombe store billions of tonnes of carbon, protecting against climate change.

“Since 2017, there has been an active programme of restoring this forest reserve,” said Boaz Basigirenda, a manager in the Budongo System Range for the National Forestry Authority.

“Wildlife here is sensitive to any changes in its environment. This place initially had chimpanzees and we have records of elephants and hippos here.

“Due to the habitat modification and destruction, some animals moved to the marine areas and caused a lot of human wildlife conflict and loss of life.”

Environmental and economic concerns

Dickens Kamugisha, an advocate of the High Court of Uganda and a member of Uganda Law Society and East African Law Society, raised concern over Ugandans footing the bill for the grand plans.

"We must borrow almost 100 per cent of the money to be invested to build the oil infrastructure," he said.

"And it is poor Ugandans who will be forced to pay huge taxes in order to pay back these loans.

"We know 90 per cent of Ugandans survive on nature, that’s natural rainfall, natural food, natural everything.

"If we destroy the environment, we have destroyed our lives."

With Cop28 to open in Dubai on November 30, the timing of the final round of funding to secure development of a $5 billion oil refinery in Uganda could not be more stark.

Bob Natifu, assistant commissioner at the climate change department of the Ministry of Water and Environment, said oil discoveries had the potential to improve lives.

“It's the kind of aspiration everybody would want to achieve,” said Mr Natifu, who is leading Uganda's Cop28 delegation to Dubai.

“We want to see communities finance their own well-being, their individual livelihoods and how they are able to live in a peaceful and harmonious way without any dangerous ramifications.

“We have to look at how we take advantage of these enormous resources to transform societies that are very much looking forward to having clean water, access to health services and clean energy.

“I know for sure we have strong commitment to ensuring we transform societies from what they are currently to what we want them to be.”