As delegates arrive from all over the world in Dubai for COP28, Al Jazeera English has released an important two-part investigation into Uganda’s controversial oil development on the environmentally-fragile shore of Lake Albert and in Murchison Falls National Park, some of the most important areas of biodiversity in Africa.
Pipelines: at what cost in Uganda?
Construction has also just started on the world’s longest heated oil pipeline, the East African Crude Oil Pipeline (EACOP), which will serve these oil developments – transporting Uganda’s thick waxy oil 1443km across Uganda and Tanzania for export to international markets from a new tanker terminal at Tanga, on the coast – itself an area of important marine biodiversity and a known whale migration route.
The findings of this investigation are controversial, raising vital issues key to the debates at COP28 about how to ensure loss and damage funding, or reparations, for the developing countries of Global South; funding essential if they are to mitigate the effects of the climate crisis, which impact them disproportionately and are created largely by emissions from the wealthy nations of the Global North.
But the investigation also confronts uncomfortable debates about global inequality and the continuing role of the wealthy countries and corporations of the Global North in the exploitation of fossil fuels. It also asks how the nations and people of the Global South are supposed to respond to ongoing extractivism in their hemisphere.
Looking at the projects in broad strokes
In the films:
- Local activists accuse the Ugandan government and international oil companies – in particular French-based oil multinational TotalEnergies – of being complicit in the denial of human rights, failing to pay adequate compensation to Project-Affected People and producing deeply misleading figures about the true impact of the oil project and its associated pipeline on local people and communities. The film features subsistence farmers and their families who have found themselves in the path of the development describing the disruption and damage they have suffered, while activists describe arrests, harassment, and even violence inflicted on those resisting the project.
- The producers look at the role played by Yoweri Museveni, Uganda’s President for nearly four decades, who once promised to ensure Uganda’s oil would benefit Ugandan people, not international oil majors – but now stands accused of being party to secret deals which critics fear will limit Uganda’s share of any profits from the oil and plunge the country yet deeper into debt as it seeks foreign loans to fund its share of the development costs.
- Africa faces a new rush for its oil, with fossil fuel exploration going on in at least 45 of the 54 countries of the continent – a great deal of that by international oil corporations from the Global North. The film looks at the dilemma facing Uganda. The entire continent of Africa is responsible for just 3% of the world’s greenhouse gas emissions. If the wealthy countries of the world fail to deliver on pledges and promises of support, who is to say Uganda should not be allowed to exploit its own oil? But given the power and resources of the oil giants, without whom Uganda could not extract that oil, is there any way Uganda can ensure it properly benefits from those resources? And even if it does, is that worth the cost of adding to the climate crisis so adversely affecting its people?
Dickens Kamugisha, CEO of the Ugandan-based organisation the African Institute for Energy Governance (AFIEGO), is in no doubt:
It can’t remain a song that the global North has promised and has defaulted. What have we done when they defaulted? Do we still allow the companies to come here and ravage the entire continent? Are we saying because we are too poor, we cannot say no? We cannot allow this.
Uganda is landlocked and dependent on imported petroleum products – with a significant impact on the nation’s balance of payments. Commercially-viable oil fields were first discovered in 2006 extending from underneath Lake Albert up to the north of Murchison Falls National Park.
Key to Museveni’s vision was the creation of a domestic petrochemical industry with a Ugandan refinery at its heart; a refinery which Museveni believed could see Uganda creating and selling petroleum products across East Africa. For that reason he initially opposed suggestions of a huge pipeline which could transport the crude to foreign markets, via either Kenya or Tanzania, as he recalled in a speech to the 7th Uganda International Oil & Gas Summit last year:
I asked my Total friends… Where are you taking our petrol. Pipeline for what? Here in East Africa, we have got energy needs. Why don’t you build a refinery and we supply ourselves? The pipeline was actually their preferred option. Pipeline only…. to get back their money quickly. I said: ‘No, that would never happen in Uganda when I am here.’
But economic reality was to intervene. As Ugandan economist Abubaker Mayanja observes in the film, extracting oil is expensive:
Without the oil majors, it’s difficult to pull off a successful project. So, the fact that you have natural resources is not enough. You actually need the oil companies.
Anyone investing huge sums on the infrastructure to extract oil expects lucrative returns – and as quickly as possible. And that, explains Mayanja, left Uganda with little choice:
If you go for the refinery only, then you have a much longer capital recovery period, so it becomes unviable for them. And you had to think about the East Africa crude oil pipeline to sell crude.
Today, the refinery has still not been built. Several attempts to create an international joint venture to build and run the refinery have fallen through, but interviewed in the film, Gilbert Kamuntu, the Chief Commercial Officer of the state-owned Ugandan National Oil company, (UNOC), insists the government remains committed:
If there have been previous challenges of potential joint venture partners looking at the project and not being interested, what we can say right now is that we will either do it ourselves or we will get a joint venture partner. We will do it with our own funds, or we will go into the market. What is not negotiable is that the Uganda refinery will be developed and will be commissioned.
But while the refinery remains as a concept, EACOP the pipeline is already under construction – despite also struggling to find international funding.
Selling out to foreign interests?
EACOP is a Joint Venture Company with its head office in the TotalEnergies building in London. TotalEnergies holds 62% of the shares, the Chinese National Oil company, CNOOC, holds 8% – and Uganda and Tanzania hold 15% each. The plan was to fund the project by a combination of equity and debt.
However, an international campaign calling on banks and insurers to boycott the project has seen almost 50 international funders and insurers back out, or make it clear they will not be involved. As a consequence the shareholders have pledged to fund the entire project themselves should international funders not be found. But critics in Uganda warn that such an eventuality could see Uganda plunge even deeper into debt.
In the film, UNOC’s Kamuntu Ernest Rubondo, Executive Director of the government-appointed regulator the Petroleum Authority of Uganda, and TotalEnergies all insist that the project remains viable, despite the reluctance of so many potential investors – and the likely mid and long term pressure on oil prices caused by the drive for a global transition to sustainable energy.
In an interview conducted in their corporate HQ in Paris, TotalEnergies’ spokesperson on the Uganda project Chieck-Omar Diallo tells the film-makers:
We are definitely convinced that this project is viable. Why? Because the oil demand is increasing. And if we do not launch new fields, new projects, we will not be able to satisfy this demand. It will allow us to compensate for the depletion of the current fields.
Diallo also rejects accusations that Project-Affected People have been badly treated and that the project will have a negative impact on biodiversity in the area.
Irreversible damage already caused
But Ugandan opponents of the project insist the development is already causing irreversible damage in the area and call upon the international community to come up with funding which will compensate for the damage caused by global warming, and allow the countries of the Global South to develop sustainably and mitigate the worst effects of the climate crisis without resorting to the exploitation of fossil fuel resources which will make the problem worse.
Dickens Kamugisha of AFIEGO tells the film-makers:
I highly doubt that you are going to get better returns from oil that can compensate for the damage that is happening to the world. It is our obligation to say: “You the North, you must stop it.” If we also say: “No let’s have some oil, let’s make some money,” then we lose that moral standing.
Watch the film below:
Featured image via Al Jazeera English – YouTube