UNSTOPPABLE⎮ The 9th Oil & Gas Convention ends with an unwavering resolve by Uganda and its partners to accelerate the journey to first oil The Uganda government together with its partners have once again reassured the whole that the production and commercialisation of her oil and gas resources is well on course and unstoppable. Stakeholders attending the just-ended 09th Oil & Gas Convention were reassured that well-drilling and construction of the central processing facility and supporting infrastructure, as well as the crude oil pipeline were in earnest, while final touches were being put on negotiations for the 60,000 barrels-per-day refinery. Stakeholders were also assured that all project works were being done to global standards and in some cases being optimised above global industry standards.

Uganda’s 9th Oil & Gas Convention in Kampala has come to an end, with a renewed unwavering commitment by the government of Uganda and its partners to responsibly and carefully go ahead with all of its oil and gas projects. 

The core projects include the extraction of oil & gas from the Kingfisher and Tilenga project areas, exporting part of it via the 1443 km East Africa Crude Oil Pipeline (EACOP) and refining the rest via a refinery for domestic and regional consumption. 

At the Convention, the government of Uganda led by the Energy and Minerals Minister Ruth Nankabirwa and her Permanent Secretary Eng. Irene Batebe, together with Philippe Groueix the TotalEnergies EP Uganda General Manager variously spoke about the importance of the oil and gas project to the people of Uganda as well as emphasised the importance of just energy transition. 

In her keynote address, Ruth Nankabirwa took a swipe at activists and organisations opposing Uganda’s oil project under the pretext of climate justice but asked the partners to stand firm against the challenges. She also Ugandans who have waited for their oil to flow for nearly two decades, to be patient, for she said will be a “masterpiece” and “first-class” project. 

She however reiterated the project must go on.

“Challenges will always happen,” she said, adding: “Challenges or no challenges, we are not going to be diverted. It is like conceiving a baby for whom you have been praying that you conceive. Whether it is painful or not, you must push the baby out alive. This baby called Petroleum ⏤oil and gas for Uganda, must be pushed out alive and we must all align ourselves to that”. 

Nankabirwa made the comments while officiating the two-day 9th Oil and Gas Convention this week at the Kampala Serena Hotel, organised by the Uganda Chamber of Mines and Petroleum led by the Chief Executive Officer, Humphrey Asiimwe.

“I am calling upon people who are about to run out of patience, to be patient. To appreciate that we have been swimming against a rough tide,” Nankabirwa further said, and reassured everyone that “the outcome will be first class”. 

Nankabirwa told stakeholders that gathered together for the convention, that even amidst the challenges, being able to convene together was a good sign that “the future of our oil and gas sector is very positive”. 

“Sticking together as stakeholders is a manifest for Uganda to the entire world that Uganda qualifies to develop her natural resources and we shall remain committed to developing sustainably and carefully, the God-given natural resources,” she said.

Nankabirwa’s appointment as Energy and Minerals Minister in 2021 came at the height of a gathering energy transition storm globally where countries seek to phase out the use of petroleum products with a push towards much cleaner sources of energy such as solar, hydrogen and wind over climatic concerns. 

She has now become the poster child for Uganda’s demand for a just energy transition agenda. Her “last in, last out” approach to net zero has gathered steam especially amongst the developing world, many of whom are energy deficient. 

The Energy Minister says there has been an effort by some individuals who are acting under the pretext of energy transition to oppose the development and production of the oil and gas resources in Uganda in particular and in other parts of the world.

The journey towards first oil

Despite the efforts to de-campaign the project, Uganda has since the Final Investment Decision in January 2022, kicked off a massive oil drilling campaign last year with four oil rigs ranked fourth largest in Africa with three of the rigs drilling on the Tilenga project in Buliisa and Nwoya districts, and one rig drilling on the Kingfisher project in Kikuube in the Albertine Graben. 

French oil giant Total Energies has made considerable progress in drilling over 33 oil wells with a projection of drilling 98 oil by the end of 2024, while seven oil wells have so far been drilled at the KingFisher project.

At the convention, Ernest Rubondo, the Petroleum Authority Chief Executive also told stakeholders that Construction works for the East African Crude Oil Pipeline (EACOP) have commenced and preparation of the 17 campsites (5 in Uganda and 12 in Tanzania), 6 pump stations (2 in Uganda and 4 in Tanzania) and 2 pressure reduction stations (both in Tanzania) along the pipeline are ongoing.

He also said that investments of $1.85 billion in 2022 and $1.9 billion were made in 2023 and that in 2024, this would be ramped up to USD3.19 billion.

The intensity of these activities has continued to increase and is expected to peak this year 2024 and maintain this peak for the next two years with a working deadline of 2025 to produce oil.   

Minister Nankabirwa, also told stakeholders that regarding the refinery, her ministry was, with guidance from President Yoweri Museveni, advancing negotiations with the United Arab Emirates-based Alpha MBM Investments LLC and these would be complete soon, to pave the way for the project’s development.

“My team has negotiated the shareholders’ agreement, signed MoUs and have negotiated the fuel supply agreement. So we are on the move. That refinery is very critical. Refining 60000 barrels of crude oil every day means a lot to the people of Uganda and the region at large,” she said. 

What does the future hold? 

However, as Uganda registers admirable progress in the oil sector, Nankabirwa is of the view that globally, the aspect of energy transition has been embraced, and all countries are in one way or another working towards achieving this transition.

The challenge has however been on the rate at which this is achieved in the different parts of the world which has led to the discussion on a Just Energy Energy Transition.

Nankabirwa notes that discussions around the future of the oil industry took centre stage at the 28th UN Climate Change Conference (COP28) in Dubai between November and December of last year (2023) regarding among other things. 

“Recognising the global demand for oil and gas, COP28 proposed a gradual transition from these resources.  However, this transition period extends well beyond Uganda’s planned oil and gas boom, which is expected to commence with ‘first oil’ in 2025.” she says. 

The Energy Minister shares that the COP28 discussions emphasised a ‘last in, last out’ approach to reducing hydrocarbon production. This view is that having benefited for decades, established oil-producing nations are better positioned to reduce their output first. As a late entrant, Uganda and other developing nations are entitled to develop their oil resources and attain the same advantages enjoyed by longer-established oil producers. 

The Oil Convention happened just against the backdrop of a newly published JP Morgan report that has indicated the energy transition may face setbacks for quite a long time because of inflation, interest rates, and wars. 

“While the target to net zero is still some time away, we have to face up to the reality that the variables have changed,” the bank’s head of global energy strategy, Christyan Malek, told the Financial Times, a UK financial news publication. 

Ernest Rubondo, the Petroleum Authority Chief Executive who seconded Nankabirwa on the matter of energy transition quotes the United Nations’ definition of a just energy transition, which essentially means, that the adequacy and reliability of the energy to users is maintained and improved. 

“A just energy transition is, therefore, the one that addresses poverty and social inequity globally, while also tackling the impacts of climate change,” Rubondo says. 

Putting a just energy transition in context, it includes the appreciation of the energy challenges in Africa, where 600 million people lack electricity and 970 million lack clean cooking fuel. 

It also includes factoring in the economic needs of developing countries, where poverty eradication remains a critical objective.  This is attested to by Uganda’s National Oil and Gas Policy goal, which is, ‘To Use the Country’s Oil and Gas Resources to Contribute to Early Achievement of Poverty Eradication and Create Lasting Value To Society.’ 

This therefore calls for the need for exploitation of the available energy sources, to meet these unmet energy demands and economic needs as discussions on, and implementation of, the energy transition take place. 

For developing countries, the United Nations indicates that achieving the energy transition could cost a combined total of about USD 5.8 trillion annually from 2023 to 2030 which is an average 19 per cent of the developing countries’ GDPs or about $1,271 (UGX 4.8 million) per person. 

This financial obligation of implementing this transition can therefore not be met by developing countries overnight.  

It is also worth noting that the fossil fuel sector, by 2018, invested an estimated USD 25 trillion in infrastructure globally, therefore abandonment of such assets needs to be handled fairly and in a just manner. 

Rubondo notes that there has been a continuing increase in investment in oil and gas activities especially to address the challenge of energy security following the recent energy crisis occasioned by COVID-19 and the Russia – Ukraine war. 

The International Energy Agency reports that global upstream oil and gas investments increased by about 11 per cent to USD 528 billion in 2023, the highest level since 2015 and is expected to average USD 22 billion per year over the next five years. 

Rubondo, gave an example of Equinor, a Norwegian Oil Company, which also invests USD 6 billion annually in oil and gas exploration and development activities in Norway, aimed at maintaining steady levels of production until 2035. 

Shell Plc, a British oil and gas multinational has also indicated that they will produce more oil and gas this decade than previously planned. Shell is stepping up its investment in its core business of oil and gas and reducing investment in renewables.  

“Therefore, the exploration, development and production of Uganda’s oil and gas resources, is not an isolated case in the world as some activities have tried to portray but more importantly, it is being aligned to the requirements of a Just energy transition.  The revenues from the oil and gas resources can then be used to foster a just energy transition,” Rubondo emphasises. 

Philippe Groueix, the General Manager of Total Energies also emphasises the importance of a fair energy transition. 

In his opening remarks at the Oil Convention, Phillipe said, a just energy transition talks about the right of African countries like Uganda to develop their oil and gas resources, even if globally the world has to decarbonise, but develop these resources with responsibility and in a more sustainable way than has been done in other countries.

“We have been working hard to ensure that the Tilenga, Kingfisher and EACOP are the best in class worldwide in terms of Carbon (Co2) emissions. On the upstream and midstream, we are talking about 13 kg Co2 per barrel produced and transported in comparison to an industry average of 33 kgco2/barrel,” Phillipe said, adding, “So we are much lower than the average of the industry worldwide due to our efforts to reduce emissions to the bare minimum” 

Phillipe noted that developing Uganda’s oil resources is being done in a sustainable manner with consideration of the environmental impact which includes footprint management. 

“By design, we have optimised and reduced our footprint in the Murchison Falls to 0.03 per cent of the surface area of the park,” he noted.

Total and CNOOC are also working to produce a combined  100,000 kilotons of Liquefied Petroleum Gas (LPG) per year which presents an opportunity to substitute the use of charcoal with LPG and in turn improve the health of communities and help to reduce the country’s CO2 emissions.