▶️ IN THE WEEK PAST: Final investment decision on Uganda's oil announced
Feb 06, 2022
Announcement of the final investment decision for the oil and gas projects has been made.
✍🏽 Presented by Joseph Kizza
(Pictorial updates by Miriam Namutebi)
Very well then. That brings us to the end of this text commentary of that big event at Kololo.
In his concluding remarks, President Museveni thanks all stakeholders for their role in the realization of today's historic development in the oil and gas sector.
Principally, a new chapter has started for the projects.
Next up, photo ops with the President, followed by the anthems (Ugandan, Tanzanian and East African) to close the ceremony.
A BIG day!
The President says there is worry that the petroleum Uganda is looking to generate may not get the market it requires. Allaying these fears, Museveni says "we have studied this. There is no possibility of petroleum to kudiba [Luganda] or kudoda [Kiswahili]" in reference to them being unmarketable.
He invites the energy ministry permanent secretary, Irene Batebe, to expound on the non-fuel alternatives generated from petroleum.
On her part, Batebe articulately talks of petroleum's contribution to the petrochemical industry, for instance polyester, synthetic rubber (for tyres, etc), petroleum jelly and medicine (some medicine is coated with petroleum products).
Museveni asks her whether they pose a danger to the environment. She admits that yes they do, but that it depends on how they are discarded.
"The key issue is how we dispose of the products," Batebe weighs in, and gives an example. If you drive your car, the tyres will not emit pollutants to the environment, but they will when you discard them poorly after they have become no longer useable.
Tasked for an explanation on the impact of non-fuel petroleum products on the enviroment, TotalEnergies EP Uganda general manager Philippe Groueix says: "Recycling is important."
Museveni says "this oil will make some contribution".
"I salute and congratulate TotalEnergies and CNOOC for finally reaching a final investment decision because I was getting a bit impatient. I am glad you have concluded all the issues," he says.
President Museveni says that in late 1980s, Shell BP reportedly withdrew their earlier interest in carrying out oil exploration in Uganda.
Therefore, he summoned the group of Ugandans who had just been trained on oil and gas abroad. Part of what this team did was geology mapping of rocks to find out whether they actually generated/could generate oil.
They also did a geophysical survey to find out if there are structures underground that have the potential to store oil. Indeed in 2003, they discovered over 20 such structures.
In his speech, President Yoweri Museveni talks of how, after coming into power in 1986, he decided to send a group of Ugandans abroad to study oil and gas so as to help Uganda make informed decisions on oil exploration at the time.
After being in the waiting lounge for a while, "it is now departure time" for the oil and gas projects, says TotalEnergies chief Patrick Pouyanné.
Before delivery his remarks, President Yoweri Museveni invites Tanzanian Vice-President Dr. Philip Isdor Mpango to make his address.
Mpango conveys warm greetings from President Samia Suluhu Hassan, whom he is representing at the function, on this announcement of the FID.
"This, indeed, is a momentous occasion," he says.
In her message, President Hassan says today's announcement is the work of "considerable efforts" and "relentless negotiations" between the two neighbouring East African nations.
Hailing their mutual relations and close ties, Hassan says that it helps that Uganda and Tanzania are "bound together by a common heritage".
With this development, President Hassan adds that a projected $3.5b (sh12 trillion) in foreign direct investment (FDI) will be realized over the period of 2022 and 2025, which she says is a 60% increase from the current situation.
The Tanzanian leader talks of the thousands of the jobs that will be created and urges the people of Uganda and Tanzania to "take ownership" of the project.
Here is the crude oil pipeline route:
On behalf of the joint venture projects, TotalEnergies chief Patrick Pouyanné announces the long-awaited final investment decision.
The representatives, standing at the fore, bump elbows in a chain formation to signal the historic development.
TotalEnergies chief Patrick Pouyanné says "this is the time of execution - and time is money, so we cannot lose a single day".
He says each day lost will be costly and adds that unity among all the stakeholders is very important.
Patrick Pouyanné, the CEO and chairman of TotalEnergies, says today is a "day of happiness" for all the companies involved in the projects as well as for the people of Uganda.
He says it is a day to be clear why they committed to investing $10b (sh35 trillion) in the project, as well as a day of committing to go to first oil in 2025 "or maybe even a little before if we could".
Pouyanné underlines that their projects are premised on low cost and low emissions.
CNOOC Uganda Limited president Chen Zhuobiao says the FID is "a step towards unlocking more opportunitues for investment and development for Uganda".
CNOOC is in charge of the Kingfisher oil field.
By the way, today is the Chinese New Year 2022. "I wish new beginnings for our projects," says Zhuobiao.
James Mataragio is the managing director of the Tanzania Petroleum Development Corporation.
He says the project builds a strong alliance betwen Uganda and Tanzania, and that it puts the two nations strategically on the web energy map. Mataragio underlines that they are determined to achieve the desired target of the project.
Katongole thanks the late Tanzanian president John Pombe Magufuli for his contribution to the project.
He adds that as Uganda National Oil Company, they will work towards enhancing national participation in the oil and gas projects.
Uganda National Oil Company chairman Dr. Emmanuel Katongole calls today a "monumental day".
He says the development will unlock the oil sectors of Uganda and Tanzania, adding that it will also spur economic transformation of the two neighbouring nations.
Katongole says today will go down in the history of the East African region as the day that Uganda and Tanzania took a decision to transform the lives of its respective citizens.
Petroleum Authority of Uganda chairperson, Jane Nambakire Mulemwa, says the announcement of the final investment decision (FID) is a "significant milestone in the country".
"It comes with a lot of responsibility for us as Petroleum Authority of Uganda. It also comes with great responsibility for all stakeholders in the sector," she adds, going on to express their commitment in working with all stakeholders.
After her delivery, minister Nankabirwa settles down to sign a renewable energy memorandum of understanding between Uganda and TotalEnergies EP Uganda, represented by general manager Philippe Groueix.
This will focus on energy security and transition in Uganda.
Shortly after, a documentary is relayed on Uganda's journey to its first oil.
TotalEnergies, a French company, is leading the construction of a crude oil pipeline from Hoima in western Uganda to Tanga, a port of Tanzania. This pipeline is expected to be the longest heated underground pipeline in the world.
TotalEnergies is also developing the Tilenga oil field. China’s CNOOC is in charge of the Kingfisher oil field.
"We pray that this project materializes because it comes with a substitute of biomass [renewable energy from plants and animals]," says Nankabirwa.
On fuel security, the energy minister says that the recent fuel shortages are "coming down". She says such crises that place Uganda in a vulnerable state will be "a thing of the past" with the advancement in the oil and gas projects.
She adds that Uganda is planning to build a refinery that would produce 60,000 barrels of oil a day.
Why is this a big deal, you wonder?
Minister Nankabirwa says that as a result of the FID, the oil industry will "positively impact on the economy through various programmes", including creating thousands of jobs for Ugandans and the people of East Africa.
It will also facilitate the provision of goods and services to the industry and see Uganda's and Tanzania's tax bases expand, she adds.
The minister says the dividends will also help Uganda settle its debt obligations as well as support the National Development Plan III.
Energy minister Ruth Nankabirwa says that today "is indeed an exciting day. This is the day that the Lord has made".
She says today's function marks "a firm commitment" by the oil companies to proceed with the oil and gas projects.
"It puts us on the path of achieving our first oil in 2025," says the minister.
"It is not only a socio-economic statement, but a political statment for us as Ugandans and East Africans at large."
Nankabirwa says Uganda is now "more confident than before and we hope that we reach our destination".
Typically, the final investment decision (FID) is the stage in an energy project in which the firms operating the venture sanction its development.
In the buildup, energy minister Nankabirwa tweeted:
"An estimate of $3b (sh10 trillion) investments is expected this year and $15b (sh52 trillion) and $20b (sh70 trillion) in the next three to five years. The planned $15-$20b investment after the FID will facilitate Uganda's Gross Domestic Product (GDP) growth by 22% and also unlock over 60,000 jobs, where over 57% will be given to Ugandans, attracting $48m annually."
MC Maurice Mugisha opens the session by recognizing the presence of the high-profile guests - ministers, MPs, ambassadors, heads of government missions and the Tanzanian delegation.
"Tunawashukuru sana, [lakini] hii mambo yangu ya Kishwahili ni ndogo sana," Mugisha lightheartedly admits his deficiency in Kiswahili language as he particularly welcomes the team from neighbouring Tanzania.
Prayers next - to bless the occasion.
Meanwhile, Ruth Nankabirwa, the Minister of Energy and Mineral Development earlier said this is going to be a "historic week in our country and the petroleum industry".
It is a few minutes after midday on a fairly warm Tuesday in Uganda's capital Kampala.
The function at Kololo has started with the anthems. First, Uganda's anthem followed by Tanzania's. The East African anthem is next. Great job by the Uganda Police Force band for animating this!
As mentioned earlier, Tanzania's Vice-President Dr. Philip Isdor Mpango is attending the event, representing President Samia Suluhu Hassan, as a witness.
President Yoweri Museveni has arrived at Kololo.
Tanzania's Vice-President Dr. Philip Isdor Mpango, has arrived at Kololo, received by his Ugandan counterpart, Jessica Alupo. Also around is energy minister Ruth Nankabirwa (extreme right in the picture immediately below).
Mpango is representing President Samia Suluhu Hassan. President Yoweri Museveni is expected at Kololo.
📸 Check out some pictures from Kololo:
The beautifully-ornated Cranes Performers doing what they do best . . .
From left, Finance minister Matia Kasaija, works and transport minister Gen. Katumba Wamala and Attorney General Kiryowa Kiwanuka are having a chat . . .
High-profile officials, including former energy minister Irene Muloni, are attending the function . . .
The FID announcement signifies the commitment of the oil companies to invest over $10b (about sh35 trillion) to develop Uganda’s oil and gas resources.
The venture partners include:
- Uganda National Oil Company
- CNOOC Uganda Limited
- Petroleum Authority of Uganda
- TotalEnergies Uganda
- Tanzania Petroleum Development Corporation
Hello and good morning
It is a BIG day for Uganda. Today, Government, along with joint venture partners, are set to announce the final investment decision (FID) on the development of the Tilenga and Kingfisher oil fields in the Albertine region.
The decision will also be on the construction of a 1,445 km crude oil pipeline, the East African Crude Oil Pipeline (EACOP).
The function is happening at Kololo Independence Grounds in Kampala, where guests are arriving.