Kingfisher ESIA Certificate Won’t Conserve Environment & Livelihoods

By Catherine Twongyeirwe

On Monday 9th March 2020, NEMA awarded CNOOC a Certificate with conditions approving the Environmental and Social Impact Assessment (ESIA) report for the Kingfisher Development Project.

Kingfisher project is located in Kikuube and Hoima districts in Uganda which shares the border with the DRC. In addition, oil for the project will be drilled from under Lake Albert. Any damage to the lake arising from the vertical and horizontal drilling or any oil spills from the project poses an environmental risk.

The Kingfisher project is located in sensitive ecosystems such as Lake Albert, Bugoma Central Forest Reserve, Kamansinig River and other. The project area also has communities that entirely depend on fishing for food, income and other critical aspects.

The Kingfisher oil project is comprised of the listed infrastructural components, a Central Processing Facility (CPF), heated feeder pipelines, 46.2km feeder pipeline from the CPF to the refinery in Hoima, flowlines from well pads to the CPF, four well pads, water abstraction station on Lake Albert, access roads, workers’ camps, underground electricity cable, a drilling storage yard, An airfield among others.

Despite the gaps in the Kingfisher ESIA report and violation of laws during the two Kingfisher public hearing that took place in June 2019 in Kikuube and Hoima, NEMA issued a certificate of approval with conditions for the Kingfisher project.

The certificate with conditions is insufficient to conserve the environment and livelihoods because during the public hearings organized for the Kingfisher project, laws were violated and there were gaps in the Kingfisher ESIA report. Among the laws violated during the public hearings included:

  • Failure by the presiding officer to organise more than two public hearings was contrary to guideline 6 of the EIA public hearing guidelines. The guideline empowers the presiding officer to hold a hearing in various locations in the country depending on the location, nature of the project and the cost involved in holding the public hearing. Therefore the public hearings were insufficient having big and unmanageable numbers at the public hearings. 
  • Guideline 15 of the 1999 EIA public hearing guidelines which gives a right to interested parties to use ten minutes to make their presentations were violated. While the guideline provides that the presiding officer may extend or limit the duration of a presentation, limiting community members who are most affected by a project was against the principles of natural justice. The presiding officer asked community members who made informal presentations were asked to ask only one question. This showed that the hearings were not organised to listen to the views of the people but were a formality meant to mislead the public that there was public participation in the project. 
  • Further, the public hearings were against Guideline 4(4) that requires that all public hearings be conducted in a structured manner so as to permit a fair and just examination of all information and matters relevant for the hearing. Organising two public hearings for two districts which were participated in by over 12,000 people meant that NEMA and PAU failed to ensure that a fair presentation of views by the interested stakeholders was undertaken. Indeed, while the developer used over one hour to make a presentation, communities were given little time. Therefore they was no fairness during the hearings. 
  • Article 41 of the 1995 Uganda Constitution was violated which provides the public with the right to access information in the hands of the state while the study covered both environmental and social impacts of the project, the developer did not attach copies of the Resettlement Action Plan (RAP) reports in the ESIA submitted to NEMA. In turn, NEMA did not publically share a full ESIA report including the project RAPs for public comments. It is unfortunate that the developer did not submit the RAPs alongside the ESIA for public scrutiny. The None Technical Summary (NTS) of the Kingfisher oil project ESIA report states that the mitigations for the social and economic impacts of the land acquisitions under the Kingfisher project and resettlement activities shall be in the RAPs. However, these RAPs were not part of the Kingfisher ESIA report. NEMA is therefore called on the public to present comments on both the social and environmental impacts of the Kingfisher oil project in absence of the said RAPs. This means the developer presented an incomplete ESIA to NEMA and therefore comments were based on incomplete reports.

In addition to the violation of laws, there were gaps in the ESIA report for the Kingfisher project, among them were failure to involve transboundary communities: The Kingfisher oil project will impact Lake Albert, a shared lake between Uganda and DRC. River Nile also crosses through Lake Albert on its way to Sudan, Egypt and the Mediterranean Sea. This means that the project will affect transboundary communities. However, the communities were not involved in the public hearings. 

While the Kingfisher project’s ESIA report noted that oil will be transported in heated pipelines from the oil wells to the CPF and to the oil refinery, it failed to provide information on the risks of heated pipelines on flora and fauna and how those risks can be avoided or mitigated. The impacts of heated pipelines on some sensitive ecosystems such as Bugoma forest which harbors chimpanzees could pose a serious threat to their sustainability.

In a nutshell, issuing a certificate with conditions to CNOOC will not conserve the environment and livelihood basing on the gaps in the ESIA report and violation of laws during the public hearings as discussed above. The certificate should be cancelled until the gaps are addressed.

 

When Covid-19 & OPEC Price War strikes Africa's Oil & Gas Sector

While the short-term effects of Covid-19 on world economies are already being felt and put millions in a situation of economic distress, their long-term ones are yet to be fully grasped. In sub-Saharan Africa, the impact will be felt even stronger because the pandemic is being combined with a historic crash in oil prices, putting pressure on state budgets and testing the resilience of the continent's strongest energy companies.

The immediate effect of Covid-19 for the sector has been on the demand for crude oil, and on its prices. Most analysts and operators now agree that 2020 could see a negative demand growth for oil globally as industries shut down and countries around the world go on lock down. The effect on prices has been nothing short of devastating: they have reached their lowest levels since 1991 and currently stand at below $25 a barrel.

For Africa, this means an immediate pressure on state budgets and macro-economic stability. Apart from South Africa, the continent's biggest economies rely heavily on oil revenue to fuel state budget and public spending and ensure macro-economic stability. All sub-Saharan Africa's producers had budgeted 2020 with an oil benchmark well above $50, from $51 in Equatorial Guinea all the way up to $57 in Nigeria. With predictions that oil prices won't go anywhere above $30 for the rest of the year, most budgets need to be re-adjusted and public spending needs to be drastically cut.

According to the Atlantic Council, major African producers could expect multi-billion dollar losses in state revenues this year. Congo-Brazzaville could take the hardest hit, with a loss representing 34% of its GPD, in a country where debt-to-GDP ratio is already around 90%. The same applies to Angola, where oil prices at $30 would generate a revenue loss of almost $13bn, or 13% of GDP.

Equatorial Guinea, Gabon and Chad could see losses of almost 10% of GDP due to the ongoing crisis. Nigeria finally would suffer the biggest lost with $15.4bn, still according to the Atlantic Council. While it would represent only 4% of its GDP, the impact on marginal producers and local jobs would potentially be devastating. Newer producers would also suffer revenue losses: in Ghana, the the Africa Centre for Energy Policy (ACEP) estimates a potential revenue loss of 53% down to $743 million instead of the $1.567bn the country expected to receive this year.

"Thousands of Africans and expats are going to be laid off in oil-producing countries as companies shut down their drilling rigs and planned projects. We need to face the reality as these times are unprecedented. The uncertainty is even more frustrating for oil companies and the workers. Forgive me but there is blood on the streets, in the water and the air has the coronavirus," said NJ Ayuk is Executive Chairman of the African Energy Chamber and Petroleum industry lobbyist.

"Petroleum-producing countries need to come together and work with the private sector in order to get us through the COVID 19 crisis and mitigate the economic fallout as much as possible. When the US and Europe are talking about a recession, most African countries and the common man on the streets have likely already entered a depression," added Ayuk.

The long-term effects that Covid-19 will have on the sector in Africa depends on what happens this year and in the following month. Cuts in exploration spending and cancellation of drilling plans today could potentially mean years of delay in new discoveries, reserves replacement and new fields being brought on stream. The biggest international oil companies operating in the continent are all cutting spending by an average of 20% globally, which is set to impact exploration and projects in Africa.

While ExxonMobil considers several reductions in spending, Shell has already announced a reduction of underlying operating costs by $3 to $4bn and a reduction of cash capital expenditure of $5bn. Total's organic capex is being cut by more than $3 billion, representing 20% of its planned 2020 capex. Chevron is also reducing capital and exploratory spending by 20%, including a $700 million cut in upstream projects and exploration.

These IOCs were expected to take major final investment decisions this year or in the near future on multi-billion dollar projects in Africa. These include Shell's Bonga South-West project, ExxonMobil's Bosi, Owowo West and Uge-Orso projects, or Chevron's Nsiko project. regardless of how close each of these were to FID, they are very unlikely to get sanctioned this year. Recent statements from independents are going in the same direction. Woodside Energy for instance is currently reviewing all options to preserve and enhance the value of its Sangomar Offshore Oil Project in Senegal, whose first oil was expected in 2023.

Beyond oil, natural gas and LNG projects are also already being delayed. ExxonMobil's announcement that it would postpone the green-light on Mozambique's multi-billion dollar Rovuma LNG project is sending worrying signals for instance. Similarly, BP and Kosmos are already working to defer the 2020 Tortue Phase 1 capital spending for their multi-billion dollar FLNG project in Mauritania and Senegal. Together, Rovuma LNG and Greater Tortue Ahmeyim represent the biggest hopes Africa had to strengthen its position as a new global LNG export hub. Delaying such projects will have significant consequences on forecasted economic growth in each country.

Finally, the long-term impact of Covid-19 is taking shape right now, as exploration programs are put on hold. Much-awaited drilling like FAR's plans in The Gambia this year have been suspended. Other planned seismic acquisition projects have also already been cancelled, such as EMHS' CSEM Survey offshore Senegal and Mauritania for BP which was set to begin this month, or Polarcus' 3D seismic acquisition project offshore West Africa. Meanwhile, most licensing rounds that were set to confirm Africa as a global exploration frontier this year will most likely not live up to expectations. South Sudan for instance has already announced the suspension of its oil & gas licensing round this year.

While African nations grapple with the crisis brought by Covid-19 and the OPEC price war between Saudi Arabia and Russia, the initiatives they take today will determine the future of their oil & gas industries for years. Local companies, be they producers or services providers, are at the frontline and need all the possible support they can get to avoid cutting jobs and survive the crisis. As Shoreline Energy CEO Kola Karim recently phrased it, "when the elephants fight, it's the smaller producers that suffer." Supporting these smaller producers and their local contractors should be a priority to preserve the long-term future and prosperity of Africa's oil & gas sector.

Mozambican Gas Promise And Why It Epitomizes The African Dream

By NJ Ayuk

It has been almost exactly ten years since Anadarko drilled the well that would give Mozambique its first major gas find in over sixty years of mostly disappointing oil and gas exploration. Many wells followed that first offshore discovery in block 1 and further in ENI-operated block 4.

In what seemed like the blink of an eye, Mozambique's known natural gas reserves spiked from nearly nothing to over 165 tcf, placing it as the continent's third biggest reserve holder.

Just like that, one of Africa's poorest countries was about to become one of the world's biggest energy players. Well, not really just like that. In 2010, Mozambique had no know-how in oil and gas, no negotiation capabilities, understanding of the sector, no appropriate legal framework in place, nor human or financial capital to take advantage of this momentous thing that had just happened.

A country that at the time could offer access to electricity to only 18% of its citizens, was suddenly endowed with enough natural gas to power half of Europe for a couple of decades and more.

Since then, much water has passed under the bridge and ink over paper. Presidents, ministers and corporate leaders have been replaced, licenses have changed hands, projects have been proposed, declined or approved, and now, more than ever, the promise of wealth seems close, but is it?

After all, we are ten years in and no natural gas is flowing, no LNG is being produced or sold, and while a bit better off, at 27% of electricity penetration, most of the country is still in the dark.

But that should not fool us, Mozambican leaders have learned much and more over the last decade, and despite some challenges, the country seems ready to take on a new stage of wealth and growth.

It was that learning curve that taught these leaders to seek out international expertise to support resource management training and legal framework development.

On the one hand, the national oil company hired Wood Mackenzie to help it prepare for the responsibility to manage and sell its corresponding portion of the resources, which has resulted in the forming of a consortium with international oil and gas trader Vitol, in September last year.

On the other, the government sought the support of more experienced energy producers and international partners, including the IMF or the World Bank. Just this month, Mozambique's President Filipe Nyusi met with Norway's Crown Prince Haakon and signed an agreement for support on natural gas resource management.

It was this concerted capacity growth that culminated in the new Petroleum Law of 2014 and on the successful bidding round for exploration blocks that took place the same year, a move that took advantage of the enormous attention the country's acreage was receiving.

This self-actualization process combined with close, albeit sometimes slow, negotiations with the international oil companies that are leading these development efforts have resulted in final investment decisions worth dozens of billions of dollars for the development of liquefied natural gas plants in Mozambique.

Enormous Economic Opportunity

As it stands, Total's 12.9mn t/yr Mozambique LNG project (which it took over from Anadarko) is expected to enter production in 2024. The latest news indicates that ENI's 3.4mn t/yr Coral South FLNG project is on schedule to come online in 2022.

And just last week, the Mozambican Ministry of Mineral Resources and Energy said it expected FID from the ExxonMobil-led 15.2mn t/yr Rovuma LNG scheme by June 2020. The project is expected to start operating by 2025.

The implications of this are tremendous. Just in foreign direct investment, Total's USD$25 billion investment in the LNG plant amounts to more than two times Mozambique's current GDP.

Not to mention the trickle-down effect on job creation, supply and associated services industries, etc, and that's just one of the projects to be developed in an area that is far from properly explored. Together, the three projects are estimated to bring up to USD$54 billion in investment over the next few years.

Further, taking into account the relatively low domestic needs for natural gas in Mozambique, these three projects alone could place the country among the five biggest LNG exporters in the world, up there with Qatar, Australia, Malaysia and the United States.

However, if the domestic needs are small now, they are expected to quickly rise. The government has wisely negotiated for part of the production to be diverted to the domestic market, which can be used for power generation, to feed a gas-based industry of fertilizers and petrochemicals, to fuel homes or even to export via pipeline to neighbouring countries.

Already, the government has secured multilateral financing for a 400MW gas-fired power plant and transmission line to the capital Maputo, which will draw on national gas production and will dramatically contribute to improve power reliability in the capital.

To help accelerate the industry's development, Mozambican officials were at the Subsea Expo in Aberdeen to showcase the country's opportunities to North Sea companies.

The aim is to secure a well-established supply chain that will support a streamlined development of the industry, as well as bring expertise into the country and promote the development of indigenous companies and workforce.

All these developments are making investors excited and analysts optimistic. Rating agency Fitch forecasts that natural gas production in Mozambique will climb 26.5% per year in the run up to 2029 and that will fuel an average 12.4% GDP growth per year throughout the decade.

These are fantastic news for a country that has suffered so dramatically with the combined effect of the Idai and Kenneth cyclones last year, which affected much of the economic activity and stranded GDP growth in 2019 at 1.9%. Already, the African development Bank sees a rebound in 2020, forecasting a 5.8% growth for 2020.

And that is another reason the development of Mozambique's natural gas resources will be paramount for the future of the country. It will allow for the development of a more diversified and resilient economy, that will be less subject to external shocks.

Cautionary Tales

The landscape is so momentous for Mozambique at this point in time, that it is of paramount importance to get things right. We have had too many African stories of grand plans gone wrong and we do not need another one. The future of the country is at stake and that of its people.

So far, Mozambican leaders have shown resolve to push forward suitable policies and facilitate the industry's development, but good governance and civil society participation have been shown again and again to be fundamental pillars of successful resource management.

Already, the country battles violence in its northern region, in the site where one of the LNG plants is to be developed. Armed insurgents, allegedly with an extremist religious agenda, have been attacking small villages in the region and foreign workers. The operating companies have requested the government to send in the army to help control the situation.

Some reports indicate that some of these insurgents come from extremely poor backgrounds and have been radicalized based on the idea that the oil and gas companies are there to steal their resources and that no one will benefit.

Here is where the need to integrate the population comes into play, not just through local content policies and by creating employment opportunities for them, but also by educating them about what is being developed, what to expect and how that will affect and benefit them.

This needs to be combined with strict transparency and resource management policies, upheld by institutions with the authority to implement regulation. This month, the Mozambican Centre for Public Integrity indicated that the country could have lost a considerable amount of money simply for failing to certify the real costs of natural gas projects declared by the companies in the period prior to 2015.

These events hurt the public image of the industry and spur social unrest at a time when the country should be focusing on maximizing the positive effects of this sector for the economy and ensuring that every Mozambican stands to gain from the country's wealth.

Allies like Russia and the US have offered to help with the security situation. Others have offered cooperation in resource management, and their support should be welcomed but, it is on the shoulders of Mozambican leaders that the responsibility of a lifetime falls to make the best decisions for the future of their country and their people. They cannot let them down.

NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.

Why Climate Change Is A Major Global Threat

By Isidoros Karderinis

The climate change, that is, the change of the global climate and in particular the changes in meteorological conditions that extend on a large time scale, is a major global existential threat.

The greenhouse effect causes the increase of temperature of the planet primarily due to the tremendous increase in carbon dioxide, which has increased by 35% since the beginning of the industrial revolution.

And of course, the lion's share in pollution of the atmosphere with 50% of all carbon dioxide have Europe and North America. All other countries together are responsible for the other half, while the poorest countries are the least responsible. However, the people who live in these countries it is they who will suffer more strongly of the consequences.

The causes of climate change are mainly identified in combustion of fossil fuels (coal, oil, gasoline, natural gas, etc.) which account for 50% of total emissions, in the production and use of synthetic chemicals, in disaster of forest areas which contributes to the production of additional gases in the atmosphere and of course to the greenhouse effect by 15% and in conventional agriculture and livestock farming, which account for 15% of emissions.

The expert scientists knock the danger bell and warn that if there is no urgent global coordinated action by political leaders, governments, industries and citizens around the world, the temperature of the planet is likely to rise above 2°C relative to pre-industrial levels by 2060 and the increase could even reach 5°C by the end of the twenty-first century, fact that will make the lives of future generations problematic.

Such an increase in the temperature of our planet will have a devastating impact on nature, bringing about irreversible changes in many ecosystems and consequent loss of biodiversity, that is, all living organisms and species that makeup life on the planet, that is, animals, birds, fish and plants (fauna and flora). Many species are expected to disappear from areas that will be directly and severely affected by climate change.

Today, compared to 1850 -from when recording data began- a temperature increase of 1.1°C is observed. So, it is vital importance, the increase not to exceed 1.5°C, because as scientists estimate, beyond this crucial point there will be no way back.

The climate change, however, which is due to human activities, is a tangible ominous reality and is already adversely affecting our planet. The sectors responsible for the production of greenhouse gases are primarily the sector of energy produce (units of production of electrical power, refineries) but also industrial activities, the modern means of transport (cars, airplanes, etc.) and the activities of the primary production sector.

So, the extreme weather events, the uncontrolled fires in forests such as the Amazon that have been characterized as the "lung" of the planet, the heat waves, the heavy rainfall, the prolonged droughts that create serious eating problems in the affected areas of the planet, the very powerful hurricanes, are becoming constantly more often and more intensively, costing tens of thousands of lives every year and causing huge disasters.

The ice at the same time and snow on the poles are melting, with the Arctic being the biggest victim to date, and the world average sea level goes up, as a result, to be caused floods and erosion on coasts and lowland coastal areas and to be created, environmental refugees. If this unfavourable development continues, areas such as the Netherlands and Venice will be at risk of being permanently lost under the sea waters as new Atlantis.

The climate change also increases existing diseases worldwide but also creates new ones, and can also lead to premature death. Too many diseases are particularly sensitive to temperature change. To them included communicable diseases such as yellow fever, malaria, encephalitis and dengue fever, but also eating disorders, mental illnesses, cardiovascular diseases as well as respiratory diseases.

The climate change will also have negative impacts on the economies of the countries given the fact that the high temperatures undermine the productivity of most sectors of the economy, from the agricultural sector to processing. Valid scientists predict that by the end of the century, global GDP will have fallen by 7.22% from what it would have been without climate change.

The teenager Swedish activist against climate change, Greta Thunberg, has managed in the most vigorous and loud way to pass the debate over this huge problem, by the heads of state and government and public dialogue, in society and in the friendly discussions, mobilizing millions of people around the world, especially young people, who began to demonstrate demanding by governments the immediate taking of measures for the confrontation of climate change.

So, Swedish MPs rightly suggested her for the Nobel Peace Prize. And of course, Greta Thunberg has big right when she says that the measures are being taken to reduce greenhouse gases and, above all, carbon dioxide are not sufficient.

So, what are the appropriate measures to be taken without delay to effectively reduce greenhouse gas emissions by 2050 and keep the temperature at + 1.5°C?

The basic policies for resolutely mitigating of the problem consist in promoting and utilizing renewable energy sources (wind, solar, biomass, etc.), the enhancing energy efficiency, the drastic reduction of the exploitation of oil and gas deposits and the imposition of carbon taxes in order that to limit the use of fossil fuels and thereby to reduce significantly carbon dioxide emissions by 2030 and eliminate them by 2050 at the latest, the rapid reduction of emissions of methane, carbon black and other short-lived pollutants that burden the climate, the restoration and protection of ecosystems and, above all, forests.

The Paris Agreement, the first universal, legally binding agreement for the climate, entered into force in 2016 with great optimism and manifest ambitions, despite the official US departure statement, which are one of the biggest polluters. Four years have passed since then and there are no substantial results, fact which raises serious questions as to whether there is really the political will to tackle this particularly threatening global problem.

In closing, I would like to emphasize that the effects of climate change will be so dramatic that human civilization will be in danger to collapse as a paper tower. So, in the face of this extremely dangerous climate crisis, the citizens around the world should increase their mobilization even further and the political leaders to finally stand up at the height of the circumstances and take immediately the necessary drastic measures, before it is too late, to reverse this unsustainable course and save the planet.

Isidoros Karderinis is a novelist, poet and columnist in Greece.

Locusts, Climate Change & Oil Exploitation

On Sunday, February 9, 2020, media reports indicated that Uganda had been invaded by locusts. That same day, the 33rd African Union (AU) Heads of State and Government Assembly commenced in Addis Ababa, Ethiopia.

The two-day meeting was held under the theme: Silencing the guns: Creating conducive conditions for Africa’s Development.

As the leaders deliberated on topics such as conflicts in the Sahel region, sustainable funding of Africa’s development agenda and others, scores of Ugandans panicked over the locust invasion.

A government inter-ministerial met to discuss measures to address the locusts, which the public was informed could eat food that could feed 2,500 people per year!

In addition, army officers and others were shipped off to Karamoja, the site of the reported invasion, to address the threat. Several other efforts were engaged in.

LOCUSTS AND CLIMATE CHANGE

While some of the above was ongoing, the AU Heads of State and others deliberated on matters that would improve the wellbeing of African citizens.

However, they did not discuss how African Heads of State in alliance with national and international agricultural, oil and other companies are contributing towards climate change and are exposing Africans to more potential locust invasions.

With the permission of African leaders, activities such as destruction of forests such as Bugoma in Uganda for sugarcane growing and exploitation of fossil fuels (oil, coal and gas) including in eco-sensitive areas such as national parks, lakes, rivers and forests in Uganda, Tanzania and Nigeria among others are ongoing in Africa today.

Both the burning of fossil fuels and deforestation are drivers of global warming and consequently, climate change.

Yet climate change is part of the reason that Uganda, Kenya and other Eastern African countries are in the predicament they are in today. Moreover, this is a predicament that African countries are ill-equipped to deal with.

As pointed out by the UN Secretary General, Mr. Antonio Guterres, warmer cyclones caused by climate change have created the perfect breeding conditions for locusts. Per information from the Food and Agricultural Organisation (FAO), the warmer cyclones resulted in rains in Oman, which enabled the breeding of the desert locusts. 

The locusts invaded Eastern Africa thereafter and have caused serious damage. FAO estimated that 200 billion locusts invaded Kenya. The locusts, which eat their own weight in food every day, destroyed pasturelands which had only been rejuvenated after drought.

Further, the damage caused by the locusts in Somalia was so much so that the country declared a state of emergency after the insects damaged about 70,000 hectares of food supplies in the country and in Ethiopia.

Experience shows that when food and pasturelands, which are major sources of income for many households are destroyed, other impacts follow.  Incomes reduce, children’s education suffers as parents lack incomes to pay school fees, and even domestic violence due to increased poverty in homes is seen.

OIL AND CLIMATE CHANGE

Now, several countries in Africa including Nigeria, Angola, Cameroon Niger, Algeria, Equatorial Guinea, Ghana, the Democratic Republic of Congo (DRC) and others are oil producers. In addition, several countries including Uganda, Kenya, Tanzania, Togo and others are planning or are undertaking activities to become coal, oil and gas producers.

The above countries argue that they need to produce coal, oil and gas not only to create jobs but to generate revenues to support their respective economies among others.

However, the burning of fossil fuels such as coal, oil and gas is the biggest contributor to climate change.

As earlier noted, climate change has been cited as the cause of the biggest locust invasion to be seen in Kenya in 70 years and in 25 years for Somalia and Ethiopia.

To continue to exploit oil to exacerbate climate change is to put the lives of African citizens at risk. Moreover, poorer African states are more vulnerable to the impacts of climate change. African states have too few resources to manage climate change impacts.

Indeed, the Ugandan government’s response to the locust invasion in Uganda on Sunday, February 9, 2020, was a testament to this. The country had no standby expert manpower and equipment such as airplanes to spray the locusts. Communities in Teso reported that they resorted to making noise to scare the locusts away.

One may argue that oil revenues could be used to make African states climate-resilient. However, experiences from Nigeria, Angola and other oil-producing countries show that oil revenues are never used for the benefit of citizens. Instead, they are largely abused by corrupt government officials at the expense of citizens’ wellbeing.

In line with available evidence that says that up to a 75% of known fossil fuel reserves including oil, coal and gas must be left unexploited for the Paris climate target to be attained, African countries must consider leaving fossil fuels unexploited. They should invest in other economic activities such as agriculture, tourism and others.

Further, in line with the AU’s 2020 theme, African countries should demiltarise oil production and should stop attacking citizens that critique oil activities in Africa.

The writer is the Senior Communications Officer at Africa Institute for Energy Governance (AFIEGO).

Why A Delay To Sign FID For Oil And Gas Industry Is Both Good & Bad For Uganda

By Michael Businge

FID means Final investment Decision. And these decisions are taken by the Board of Directors. It can include decisions about financial resources, by finding out whether they are sufficient or not. This is ascertained from developers and in this case oil developers such as Total E&P, CNOOC, etc.

The delay of FID is good anyway, but why?

 It is a blessing in disguise because it has enabled Uganda to put together necessary systems and structures for good oil governance and management.

For instance, unlike countries like Ghana which began oil production without proper oil laws, Uganda had to get enough time to have good laws governing the sector.

Key institutions to oversee proper licensing, regulation and management have been established. Petroleum Authority of Uganda, Uganda National Oil Company, Petroleum Directorate have all been established. This is a plus for us as a country.

It has also given us considerable time to put necessary infrastructure like roads, acquisition of land for pipeline development, preparing people to set up companies to provide goods and services in the oil and gas sector.

It has given us the necessary time to build capacity and manpower to work in the oil and gas sector, for instance, there is an inbuilt capacity for petroleum engineers, tax experts, negotiators, goods and service providers, and so much more.

However, there is has been some recorded negative impact due to the delay to sign FID.

There is a loss of employment for people who were working on the East African Crude Oil Pipeline, in oil camps as cooks, drivers, and so on.

This has also led to fewer goods and services being provided to the oil industry as I write this. Why? There is no much "physical" work taking place due to the delay to reach a decision.

The uncertainty from a section of Ugandans about when the first oil will come out is rising. This is due to the anxiety created where they have continued to ask themselves as to when the potential of 6.5b barrels will be translated to actual tangible values.

Remember, some communities were displaced for oil infrastructure such as the CPF, oil refinery, pipelines, roads and so on.

Therefore, as we wait for the FID, the first oil to drop, communication about concrete processes and decisions have to be told to various stakeholders in time to reduce on the anxiety, for proper planning for masses to benefit from the oil and gas sector.

The writer works as a coordinator at Youth4Nature Uganda

Youth4Nature Uganda is a youth movement that ensures maximum utilization and management of Natural Resources (Land, Forests, Wildlife, Soils, petroleum resources and minerals in Uganda.

 

 

Overcoming Price Volatility: Harmonising The Balance Sheet With Investment

The impact of the energy transition on the mining industry has been profound. It is one of the most energy-intensive industries in the world, accounting for an estimated 6.2% of the total global energy consumption.

It has also historically been a disproportionately large contributor to global warming, through the intensive use of fossil fuels to power operations. But now there is a spotlight on the sector, with increased pressure to move towards renewable energy.

While developments have been made, there remains increased pressure to reduce emissions. Just last week consultant McKinsey reported that mining companies need to go further to diversify their portfolios in order to meet Paris climate goals.[1]

Coupled with this pressure, there has been a period of significant volatility in commodity prices which has resulted in miners needing to keep down costs and improve efficiency. Overcoming this challenge in a context of ongoing decarbonisation is no mean feat, but adopting a rental model could be a way of harmonising balance sheets and keeping operations running smoothly.

Decarbonising versus cost

Aggreko (http://www.Africa.Aggreko.com) recently conducted a global survey to better understand the priorities of decision-makers in the energy sector. Of those surveyed, 50% said that cost is their primary consideration. But with the need to also meet carbon emissions targets, inaction isn’t a possibility. The knock-on effect has been a reluctance across the sector to invest in new green power sources with concerns it could soon be out of date as the pace of change seems to only be accelerating.

Mine operators are therefore facing a dilemma: how to integrate renewable energy into power solutions which require significant CAPEX investment when there’s a backdrop of commodity price volatility making investment unattractive.

The Syama gold mining complex in southern Mali was able to balance this well. Aggreko having recently signed a contract with Resolute has been able to support its ambitions to reduce carbon emissions and improve overall efficiency for the site.

Once installed, Aggreko will operate and maintain a 40 MW thermal power plant and a 10 MW battery storage system, with a further 20 MW of solar power planned in 2023.

The hybrid solution will reduce Syama’s power costs by an estimated 40%. Once all the renewable power sources are fully installed it will also reduce carbon emissions by approximately 20%. By using a rental option, Syama were able to de-risk the investment into greener energy due to not having to invest capital into the power solution.

Long term role of mines versus cost

Advances in technology are also driving change for the mining industry in terms of the pool of metals and minerals that are considered to be a worthwhile investment. The growing popularity of electric vehicles is leading to an increase in the need for cobalt, lithium and nickel, which are important component parts of lithium-ion batteries.

But, while this presents an opportunity for miners, this also means capital investment opportunities in some mines, such as coal, has become more difficult. There’s also a risk in investing in the latest technologies as and when they emerge due to the market changing regularly.

The Tasiast mine, one of the largest open-pit gold mines in Africa, located in the remote northwestern region of Inchiri in Mauritiana, was facing this dilemma. Its off-grid mine was powered by an inefficient fuel source and prone to regular breakdowns, incurring huge maintenance costs.

The life expectancy of the mine was expected to last another decade, and with the added consideration of diesel price volatility, Kinross needed to think about power for the mine longer term, as well as what they could do to alleviate the cost implications they were suffering short-term.

To address their immediate issues, Aggreko offered a solution that was easy to integrate into their current power mix. Kinross now has reliable, guaranteed power 24/7 to ensure its gold production is unaffected by power issues or further shutdowns. Given it was a rental solution, it also gave them the necessary breathing space and time to review longer-term power options for the remaining life of the mine.

Managing capital and project risk

It’s clear that mining is a sector undergoing a deep transformation as a result of the energy transition. The use of hybrid power solutions at mines is only set to increase, while investment will continue to be driven by innovation in green technology.

Mining companies are in the unique position of needing to deploy green energy sources whilst also being a key component in the supply chain for new low-carbon technology. Finding nimble solutions, such as hybrids or microgrids, provides companies with the agility needed to respond to the quickly-evolving energy landscape.

What’s more, a rental power model allows mine operators to do all of this whilst keeping energy costs competitive and only require an outlay of OPEX, rather than CAPEX. This means that companies have greater flexibility to respond to the rapidly-evolving market while keeping costs down.

John Lewis is the Managing Director, Aggreko Africa

How These Young Teenage Girls Are Making A Difference In Their Communities

A group of young teenage school-going girls, under their organisation Young Angels Network (YAN) are choosing to spend their holiday free time wisely by helping to address challenges in their communities.
 
On Friday 31th, the young girls aged between 12 and 15 visited and donated scholastic materials to orphans and underprivileged children at Divine Focused Church in Kalerwe. These children subscribe to a program known as Divine Restoration of Orphans Program   (DROP) that was started by Pastor Mukisa  Patrick in 2016.
 
The group of 8 girls in the company of some of their contributing partners took writing and reading books, pens, pencils, rubbers, rulers, mathematical sets and an assortment of foodstuffs such as bags of posho, sugar, sweets and sodas to help out the children as they prepare to start school. Also donated were some clothing items for both the children and their caretakers. 
 
According to the founder and CEO of the organisation, the 15-year-old Daniela Akankuda said they decided to come together to create a platform where teenage Girls can connect,  identify social challenges within their communities and creatively find solutions to these challenges. 
 
"We use part of our pocket money/ savings to do simple acts of kindness that impact the lives of people around us. Instead of spending most of our time on the phone, distracted by social media and engaging in early relationships, we choose to spend it helping our communities be a better place for us and those around us. In the past, we have cleaned hospitals, markets, and participated in fundraiser car wash activities to raise funds for terminally ill teenagers. Helping out gives us so much pleasure," Akankuda said. According to Akankunda, in future, the YAN plans to engage in policy dialogues around issues that affect teenagers in general, and girls in particular in Uganda. 
 
Gillian Ahakundire, a student at Makerere University who is a member of YAN and volunteers as the Operations Manager urged other young people to seek opportunities to do charity and help out the less advantaged as a way of growing themselves, socially and spiritually. She noted that you do not need to have so much to reach out to others. Even the little one gives can change a life. She offered to pay school fees for one of the children at the church school.
 
Pastor Mukisa urged Churches and pastors to use their resources and influence to help out the needy and solve challenges in communities where they operate instead of focusing on building bigger churches and mansions. He noted that after all, the body of Christ, are the people themselves.  
 
"Kalerwe is a slum area and we have a lot of children that are out of school, some because their parents died and they have no one to pay school fees but others have parents who are willing to take them to school but they can't afford because they are poor and have a lot of children. I decided to start DROP to help these children especially the girls because they are at a bigger risk if they are not in school. Most of them end up sleeping with older men who infect them and they infect their age mates," he said
 
The patron of the group, Ms. Jill Kyatuheire who is also the mother of Akankuda, urged parents to support their children’s passion and guide their ambitions to grow into people of influence and purpose. "As parents, we have lots of challenges especially in this era where there are a lot of distractions for children like phones, social media, drugs and alcohol. It is hard to keep the teenagers focused and most of them have ended up going a stray and damaging their young lives permanently. When my daughter told me she wanted to do charity with her friends, I was very excited and I decided to support them," she said
 
Ms Jeniffer Kwarisiima, a parent to one of the girls (Elizabeth Kamasiko) noted that “there are not many girls founded and headed organisations in Uganda, and to see these young girls be so focused and intentional in organizing themselves and their peers to engage in such life changing initiatives is amazing and should be highly supported”. 

Can Uganda’s Oil And Gas Companies Contribute To Clean Energy Transition?

By Sandra Atusinguza

One in every 7 people still lack electricity and most of them live in rural areas of the developing world according to UNDP  2020 report. Investing in solar, wind and thermal power, improving energy productivity and ensuring energy for all is vital if we are to achieve SDG 7 affordable and clean energy by 2020.   As we all wait the delayed announcement of the final investment decision by oil companies, this has greatly increased doubts of fast-track oil by 2020 /2021.

As government calls upon local firms to register with the National supplier data base and talent register for first priority for employment and  to supply good and services however there is limited technical capacity and specialized expertise to fully exploit the renewable energy resources potentials and this has been a great challenge to track faster the implementation of the local content policy.

Uganda’s oil fields have associated natural gas reserves estimated at 500 billion cubic feet and as some oil and gas companies like CNOOC plan to produce gas and use some of it to generate up to 42 megawatts of electricity for the company’s use and for sale to national grid.This natural gas can be used in several clean energy alternative projects which can help to contribute towards climate change mitigation, national energy security and global energy transition. Oil and gas companies must be adopting to the use of biomass, wind turbines and solar panels for oil field operations and other projects.

Ministry of energy and mineral development and ministry of transport must introduce a policy on low carbon transportation and ensure that oil and gas companies adopt it through use of high demand clean fuel vehicles mainly in natural gas( compressed natural gas  or liquefied petroleum gas) which is readily available in the Albertine graben in the next phases of oil production.

Climate change can also be mitigated amidst Oil and gas activities through carbon capture and storage, this solution to climate change help oil production with fewer emissions by capturing carbon dioxide and store it into oil reservoirs.

According to Uganda’s energy and mineral sector in its Midterm sector policy objectives, the oil and gas resources must be used to contribute to early achievement of poverty eradication and create lasting value to society.  The oil and gas industry must therefore heavily invest in new clean energy business models and technologies to transition to decreasing greenhouse gases emissions and promote energy efficiency in the next phases.

Sandra Atusinguza is the AFIEGO field coordinator

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AfDB Approves €8m Technical Assistance Grant To Support Rwanda's Ruzizi IV Hydro Power Project

The Board of Directors of African Development Bank Group has approved an €8 million grant drawn from the European Union's Africa Investment Platform (EU-AIP) to support the preparation of the Ruzizi IV Hydropower Project. The plant will be situated on the Ruzizi River between Rwanda and the Democratic Republic of Congo and will supply electricity to the DRC, Burundi and Rwanda.

When completed, Ruzizi IV is projected to produce 287 MW of electricity and exploit the Ruzizi River's full hydropower potential. Two power plants are already in operation: Ruzizi I produces 29.8 MW and Ruzizi II, 43.8 MW; a third, Ruzizi III, with a projected 147 MW output is under development with Bank support.

The project will provide electricity to millions of households, as well as small and medium-sized enterprises and industries, thereby improving the living conditions of the regional population. Greater and more reliable access to electricity will also improve the quality of basic social service delivery including health, education, and improved security.

"The African Development Bank played a major role in structuring and raising financing for Ruzizi III, and the lessons learned will be used to successfully develop and implement Ruzizi IV. The use of renewable and affordable electric power will help to reduce poverty, unemployment, greenhouse gas emissions and deforestation, as well as stabilise security in the Great Lakes region," said Batchi Baldeh, the Bank's Director for Power Systems Development.

The €8 million grant approval follows a $980,000 grant approved end-2018 by the New Partnership for Africa Development's Infrastructure Project Preparation Facility (NEPAD-IPPF), which is a multi-donor Special Fund hosted by the Bank, to co-finance this technical assistance.

Ruzizi Hydropower Plant Project IV meets the goal shared by Burundi, DRC and Rwanda to optimise exploitation of their energy resources by integrating electricity generation, transmission and distribution infrastructure. The project falls within the overall regional energy market framework being developed by the Nile Equatorial Lakes Subsidiary Action Programme (NELSAP) and the Eastern Africa Power Pool (EAPP).

Ruzizi IV also aligns with the Bank's High 5 priority to "Light up and power Africa", as well as the Bank's strategy on regional integration, and specifically, development of regional energy infrastructure. 

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