Online appendix A. Information packet
Table of Contents
A. RESOURCE DEVELOPMENT 2 B. COMMUNITY SUPPORT 8 C. CORPORATE SOCIAL RESPONSIBILITY (CSR) 10 D. CORRUPTION 11 E. DISPLACEMENT AND COMPENSATION 12 F. EDUCATION AND TRAINING 15 G. EMPLOYMENT 16 H. ENVIRONMENT 17 I. INFORMATION AND COMMUNICATION 20 J. INFRASTRUCTURE 21 K. LOCAL ECONOMIC DEVELOPMENT 21 L. POLICY AND LEGAL FRAMEWORKS 22 M. PUBLIC HEALTH 23 N. SOCIAL 24 O. SECURITY 25 P. STAKEHOLDER ENGAGEMENT 26
A. RESOURCE DEVELOPMENT
The following are responses to common questions ask about Uganda’s petroleum resources.
When did Uganda confirm commercial oil and gas resources?
Uganda confirmed commercial petroleum resources in 2006. Efforts to find oil in Uganda started as far back as the 1920s. These efforts led to the identification of surface seepages of oil and drilling of shallow wells around these seepages before 1945. One deep exploration well (Waki-1) was also drilled near Butiaba, in Buliisa district during 1938. These initial efforts were not successful in establishing commercial deposits of petroleum in the country. However, renewed and consistent exploration efforts commenced in the 1980s, which culminated into confirmation of commercial petroleum resources.
Where in Uganda are Petroleum (Oil and Gas) activities taking place?
Oil and Gas activities in Uganda are currently taking place in the Albertine Graben The Graben is part of the East African Rift System and runs along Uganda’s western border with the Democratic Republic of Congo (DRC). The Graben is approximately 500 km long, averaging 45 km in width and 23,000 square kilometres in Uganda.
How many Petroleum discoveries have been made in Uganda to date?
Twenty-one (21) oil and/or gas discoveries have been made in Uganda to date as shown in figure below
What happens after a petroleum discovery has been made?
In accordance with section 66 of the PEDP Act 2013, when a discovery is made, the licensee is required to notify the Government and submit a technical evaluation. The licensed Oil Company appraises the discovery to determine the extent of the discovery and the characteristics of the crude oil therein by drilling additional wells and/or undertaking well testing. Following completion of appraisal and interpretation of the data acquired during appraisal, the company applies for a production licence and this application is supported by a Field Development Plan (FDP)
How much oil has been discovered in Uganda?
The estimate resources in the country have increased from 300 million barrels in 2006 to 2 billion and 3.5 billion barrels in 2010 and 2012 respectively. As at June 2014, the discovered resources in the country were estimated at 6.5 billion barrels of oil equivalent in place with about 1.4 billion barrels of these resources recoverable (1 barrel is equivalent to 159 litres). The area explored presently represents less than 40% of the total area with the potential for petroleum production in the Albertine Graben. There is therefore potential for additional petroleum resources to be discovered in the country when additional exploration is undertaken.
Can all the 6.5 billion barrels of oil in place be recovered?
Geological factors including the fact that oil in the subsurface is stored in rocks with pores (similar to water in a sponge) and within structures, makes it impossible to recover 100% of the resources. The amount of oil to be recovered depends on the properties of the rock such as how the pores within the rock are connected to one another, reservoir pressures and type of oil, among others. Globally, an average of 20 to 30 per cent of the oil in place is recovered economically using the available technologies. Enhanced Oil Recovery (EOR) methods are also often used to increase the amount of oil recovered from an oil field using different technologies to supplement the natural production. EOR is used to improve movement of oil in the oil field and the different methods of EOR include polymer flooding, gas injection, and steam flooding.
What is the quality of Uganda’s crude oil?
Different types of crude oil are produced around the world. Two of the most important quality characteristics of oil are its density and sulphur content. Density ranges from light to heavy, while sulphur content is characterized as sweet or sour. Crude oils that are light (with degrees of API gravity above 360) and sweet (low sulphur content) are usually priced higher than heavy, sour crude oils. Uganda’s crude oil has; API of 210 ~ 370, with a low sulphur content but is waxy with an average pour point of 400C and hence solidifies at room temperature. Uganda’s crude oil is therefore described as sweet and medium to heavy.
How far in the ground does the petroleum lie?
The depth at which hydrocarbon deposits are found varies greatly around the world. Very shallow deposits of less than 30metres were found in the early days of exploration. Today, it is common to produce oil from more than 3,000 metres. In Uganda, petroleum has been encountered between 290 metres and 3,000metres in the discoveries that have been made in the Albertine Graben to date.
Which oil companies are licensed in Uganda?
The oil companies currently licensed to explore, develop and produce petroleum in the country are; Total E&P Uganda BV., Tullow Uganda Operations Pty Ltd, Tullow Uganda Limited and China National Offshore Oil Corporation (CNOOC) Uganda Limited. These companies are joint licensees in Exploration Areas 1&1A, 2 (Northern Lake Albert Basin) and the Kingfisher Discovery Area in the Southern Lake Albert Basin.
Which parts of the Albertine Graben are these companies responsible for?
Total E&P Uganda B.V is operating Development Areas 1 and 1A and seven petroleum discoveries were been made in this area. These are: Ngiri, Jobi, Rii, Jobi-East, Mpyo, Gunya and Lyec. Tullow Uganda Operations Pty Ltd is operating Development Area 2 and this area has a total of nine discoveries and these are Ngege, Kasamene, Kigogole, Wahrindi, Ngara, Nsoga, Mputa, Nzizi, and Waraga. The KingfisherDevelopment Area is operated by CNOOC (U) Ltd and it has one discovery, the Kingfisher Discovery. Four discoveries; Taitai, Karuka, Ngassa and Turaco are currently not under license.
At what stage is Uganda’s petroleum sector? A map showing licensed companies and their areas of Uganda’s petroleum sector has transitioned from exploration to development phase. Currently nine production licenses have been issued to Tullow, Total E&P and China National Offshore Oil Coporation (CNOOC). Withthe issuance of production licenses, Uganda’s petroleum sector effective moved from exploration and appraisal to development phase. It is at development stage that companies put in place the necessary infrastructure in preparation for production.
What is the Petroleum Value Chain?
The Petroleum Value Chain is the series of activities staring from exploring for oil to consumption of petroleum products. The Petroleum Value Chain has three major phases, namely; upstream, midstream, and downstream. Upstream covers exploration, development and production of petroleum together with decommissioning. Exploration refers to the search for petroleum accumulations and includes appraisal of the same to establish the extent (distribution) of the petroleum accumulation below the earth’s surface and the ease of flow of the petroleum from this accumulation. Development involves preparing for production by putting in place facilities and infrastructure for collection, transportation and processing of crude oil and gas. Production is the removal of petroleum from the accumulations below the earth’s surface to the surface, and preparing the petroleum for transportation and refining. Midstream includes bulk transportation of petroleum commodities (crude oil and natural gas) and products (gasoline, diesel, jet fuel, etc), refining of oil and conversion of gas. It also includes converting oil and gas into marketable products and chemicals. Downstream deals with distribution, marketing and sale of petroleum products. In some countries, downstream and midstream operations are considered together as downstream operations
What is the plan for commercialising the discovered oil and gas resources?
The National Oil and Gas Policy, 2008 recommends value addition through refining uganda’s crude oil In 2014, Government signed a Memorandum of Understanding (MoU) with the Licensed Oil Companies which provides for a commercialization plan for the development of the discovered oil and gas resources in the country. The MoU provides for the use of petroleum for power generation, supply of Crude Oil to the refinery to be developed in Uganda and export of Crude Oil through an export pipeline or any other viable option.
Has commercial production of oil and/or gas started?
Commercial production can only commence following the issuance of a production license, which authorises the holder to produce petroleum from a field whose appraisal has been completed and development plan approved. Right now three licensed companies have already been granted production licenses and are now unsertaking the necessary preparations to develop the fields. Commercial production of petroleum also requires putting in place infrastructure such as processing plants to stabilize and separate the crude oil from impurities like sand and water, pipelines for transportation of crude from the fields, a refinery to transform the crude into the various products such as diesel, petrol, and kerosene and facilities like a crude export pipeline to transport the crude oil to the export market. These will be put in place during field developement. Other infrastructure such as the road networks, water and electricity in the Albertine Graben are being upgraded to support these developments. Full scale production has been earmarked for 2020, after all the required infrastructure has been put in place.
What happens to crude oil produced during well testing?
During well testing, a well is allowed to flow crude to the surface. Well testing enables the operator to establish the flow rates, take crude for lab analysis to establish crude properties among others. So far 40,000 barells of crude have been produced during well testing and this crude is stored on site in specialised conatiners called bitutainers. The stored crude can be used for power generation especially by industries or factories that use heavy fuel oil (HFO).
How much gas has been discovered in Uganda to date?
Natural gas can be "associated gas" (found within oil), or "non-associated/ free gas" (independent natural gas reservoir). Associated gas cannot exist without oil in the reservoir which doesn’t necessarily apply to free gas reservoirs. The associated gas established in the country to date is estimated at 170 billion cubic feet (bcf) while non- associated gas is estimated at 500bcf.
How can the gas resources be utilised?
The gas resources are commercially viable and can be used for power generation. In addition, natural gas can be used for domestic purposes such as heating and cooking. It can also be used as fuel for vehicles, the production of iron and steel from iron ore, in fertilizer plants and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. Natural gas can also be re-injected into the reservoirs to maintain pressure to support production of crude oil through enhancement of oil recovery. Alternatively, after processing, gas can be used for on-site electricity generation or used as feedstock for different petrochemical industries. Another possibility is to export natural gas as a liquid. Gas-to-liquids (GTL) is a developing technology that converts natural gas into synthetic gasoline, diesel, or jet fuel.
Why is Uganda opting for development of a refinery?
Objective 4 of the National Oil and Gas Policy (2008) for Uganda is to promote valuable utilisation of the country’s oil and gas resources through in-country refining of crude oil. In this regard therefore, Government undertook a feasibility study on in-country refining in 2010 and the study recommended that development of a refinery in Uganda was an economic option for valu addition and utilisation of Uganda’s crude oil.
The refinery will also ensure security of supply of petroleum products to Uganda. In addition the refinery will create jobs for Ugandans, promote industrialisation while saving foreign exchange which would have been used to import petroleum products.
Where will the refinery be located?
The feasibility study recommended Kabaale Parish in Buseruka Sub County, Hoima district as the most suitable location for the refinery. This is due to its centrality in relation to the entire Albertine Graben, proximity to the oil fields, sparse population and relatively low laying terrain among others.
What is the planned size and configuration of the refinery to be developed?
A refinery with an input capacity of 60,000 barrels per day, starting with a capacity of 30,000 barrels per day will be developed. The refinery configuration and complexity determines which products can be produced from the crude oil. The planned refinery is expected to produce Liquefied Petroleum Gas (LPG), diesel, petrol, kerosene, jet fuel and Heavy Fuel Oil (HFO).
How will the refinery project be financed?
Government has invited private sector participation in the development of the refinery. The refinery will be developed on a Public-Private partnership (PPP) with shares of 40:60 respectively. The private share of 60% aims at attracting investors with experience and capital to participate in developing the refinery. Government has also invited East African member states to participate in the development of the refinery by taking part of the 40% public shares.
B. COMMUNITY SUPPORT
The following are responses to questions related to community and local government concerns about their limitations and unmet desires and expectations in Uganda’s oil and gas sector.
What is the role of the community in the oil and gas sector?
a) The community plays a very big role in the oil and gas sector right from exploration phase through development up to production phase. Community support at each phase is important, because they host the resource and operations affect them both in a positive and negative manner. Sometimes activities among others require temporarily or permanently acquiring land which is given out by the community as a whole or individual community members, activities create employment where community members others.
b) The community offer security for oil and gas infrastructure such as pipelines for both crude oil and refined petroleum products. Such infrastructures depend on community cooperation to ensure they are not vandalized by ill-intentioned people.
c) Communities also play an oversight role by keeping an eye on licensed companies to ensure they adhere to the necessary environmental laws and guidelines put in place by government. In case of violation of the environmental guidelines like dumping waste, communities report such companies to relevant authorities at the districts for redress.
d) Additionally, communities hold duty bearers in the oil sector to account by demanding for information on each and everything that happens in their areas and how the proceeds from the sector are managed and how they are benefiting from them.
How are communities involved in oil and gas operations?
Community involvement in oil and gas operations is not an option but a necessity. Communities should be involved at each and every step right from exploration stage through development up to production stage. Communities should be involved through regular meetings where they are updated on what companies are doing and what they plan to and this involvement should take into consideration of community input for it to be meaningful involvement.
How can the community get support from oil and gas operations? Communities hosting oil and gas operations are very important stakeholders to the sector. These communities are the ones that grant a social license to operate to licensed companies. A social license in this case is the acceptance by the communities to allow a company to undertake activities with full support from the community. Therefore communities are supposed to benefit from the sector through improved service delivery by government (hospitals, education, infrastructure i.e. roads, electricity, water and community development programs, etc.)
Can communities stop oil and gas operations if they are not satisfied with operations of a licensed company?
Licensed companies are foreign companies whose investment in the sector is much needed for our country to develop. Communities uprising against these companies only serve to scare away other potential investors in the sector. In the event that communities have complaints over operations of a given oil company or its contractors, it is good practice to engage the company or the regulators (Petroleum Authority) in a constructive manner with a view of harmonizing positions and continue working together.
How much money will the district local governments get from oil and gas operations?
The Public Finance Management Act 2015 provides for 1% share of oil royalties to be distributed among district local governments with oil and gas activities when production commences. Districts will receive this money over and above their allocations from the central government. This money is a special grant which other districts don’t get therefore it is supposed to be invested in areas that bring direct benefits to communities to improve on their social well-being. When it starts coming, communities should hold their leaders at the district and sub county level to account for how this money is used.
How will proceeds from oil be managed?
Government enacted a law (The Public Finance Management Act 2015) which provides for the establishment of the Petroleum Fund where petroleum revenues which accrue to government shall be deposited. The Act provides for withdrawals from the Petroleum Fund to be only made under authority granted by an Appropriation Act and a warrant of the Auditor General to the Consolidated Fund, to support the annual budget and to the Petroleum Revenue Investment Reserve, for investments to be undertaken. Among others, the Act also stipulates that petroleum revenue shall be used for the financing of infrastructure and development projects of Government and not the recurrent expenditure of Government.
C. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The following are responses to questions related to community and local government concerns about the design and impact of CSR in Uganda’s oil and gas sector.
What is corporate social responsibility?
Corporate social responsibility refers to business practices involving initiatives that benefit society. A business's CSR can encompass a wide variety of tactics, from giving away a portion of a company's proceeds to charity, to implementing "greener" business operations.
What are the categories of corporate social responsibility?
There are a few broad categories of social responsibility that can be looked at:
Environmental efforts: The primary focus of corporate social responsibility is the environment. The oil and gas business regardless of size of company have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.
1. Philanthropy: Companies also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs.
2. Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility.
3. Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.
Which areas should oil companies invest in as CSR?
Licensed companies usually set aside funds for CSR activities but these activities are usually in line with the business objectives of the companies. Therefore, no one can tell companies specific CSR activities where they should invest CSR funds. However, it is a good practice for the companies to consult the communities on pressing areas where CSR funds can be spent considering that CSR is undertaken as a goodwill gesture to community.
Can communities demand for CSR projects from oil companies?
Communities cannot demand CSR projects because it is only a good business practice by oil companies but not a mandatory undertaking. Communities can instead engage oil companies on sustainable initiatives in form of CSR and this engagement can inform the companies’ decision on specific CSR activities/projects to undertake.
D. CORRUPTION
The following are responses to questions related to community and local government concerns regarding favoritism, nepotism, exploitation, bribery, and fraud in Uganda’s oil and gas sector.
What is government doing to ensure a corruption free oil and gas sector?
Government acts in a transparent manner in managing the oil and gas resources by sharing with the public all the necessary information. The Access to Information Act 2005 gives every citizen a right to demand information in the possession of government. Besides, government developed and is implementing a communication strategy for the oil and gas sector, through the implementation of the strategy, different media channels are used to disseminate information about oil to the general public.
Licensed oil companies also hold meetings with communities where they keep them updated on any developments as well as available opportunities such as jobs, scholarships and upcoming CSR projects.
How safe is money accruing from oil and gas revenues?
In order to protect revenues accruing from oil and gas and ensure such revenues are spent in critical areas of service delivery to the people, Government enacted a law (The Public Finance Management Act 2015) which provides for the management of petroleum revenues which accrue to government. The law has a number of provisions that safeguard these revenues against any form of abuse. E. DISPLACEMENT AND COMPENSATION
The following are responses to questions related to community and local government concerns about actual and potential loss of property, rights, income, and/or access caused by activities in Uganda’s oil and gas sector that have a direct impact on livelihoods.
What will be the effect of oil and gas operation on land held by individuals?
Oil and gas operations require land for drilling pads, pipelines, central processing facilities, storage facilities,t access roads, waste disposal and treatment, refinery and attendant infrastructure.
What happens if someone’s land is affected by oil and gas activities?
A person whose land is affected by oil and gas activities will be contacted by an official (Liaison Officer) and told how he or she will be compensated. This may also include important deadlines that the person will need to observe.
How does someone get compensated for affected land or any other property?
A person whole land or any other property is affected will be compensated in accordance with laws governing compensation in Uganda; mainly the Constitution of the Republic of Uganda (1995), the Land Act 1998 (as amended in 2010), the Land Acquisition Act 1965, the Mining Act, 2003 Oil and Gas (Exploration, Development and Production) Act, 2013 and the Local Government Act, 1997 (as amended). Land will be surveyed, valued then the owner will receive compensation.
What does the constitution of Uganda say about land acquisition and compensation?
The Constitution of the Republic of Uganda provides for land ownership, how land can be taken by government and it also provides for compensation of people whose land is taken. Article 237(1) provides that land belongs to the citizens of Uganda and shall vest in them in accordance with the land tenure systems provided for in the Constitution. Under Article 273(2)(a), the Constitution empowers the Government to compulsorily acquire land although this power is subjected to Article 26 of the Constitution. Article 26 provides that every person has a right to own property either individually or in association with others and no person shall be compulsorily deprived of property or any interest in or right over property of any description. The article makes two major exceptions: (a) the taking of possession or acquisition of property must be necessary for public use or in the interest of defence, public safety, public order, public morality and public health; (b) the compulsory taking or acquisition of property must be made under a law which makes provision for prompt payment of fair and adequate compensation, and any person who has interest or right over the property must not be denied the right of access to courts of law.
Who Surveys the land?
An official Land Surveyor appointed by Government or the Oil and Gas company moves with the land owner in the presence of the neighbours and the area Local Council one (LC 1) or his/her representative to take measurement of the land. The affected land is mapped out and the area calculated and passed on to the appointed Valuation Surveyor to do the valuation.
How is land valued?
Land is assessed and valued according to the market value of similar land use in your area. For example, if it is used for crop growing, the value of your land will be at the same rate as of other land used for crop growing in your area. The appointed Valuation Surveyor will inspect your land and record all information needed to arrive at the market value of your land.
What type of information will the Valuer need?
The Valuer will need the owners’ name, the name of other people who share ownership or use the same land, what the land is used for i.e. commercial, residential, agriculture, forestry or any other developments on the affected land.
How are crops valued?
The Valuer counts and describes the affected crops in accordance to the District (e.g. Hoima) Compensation Rates. The affected crops may be recorded, described and assessed as seedling, young, average, medium, mature, very good, good, fair, poor and valued as per stem, per clump, per stool, per tree, per cluster, per square metre, per acre or per hectare. In addition, a photograph of your claimed property will also be taken.
What is District Compensation Rate?
The District Compensation Rate is a list of prices of crops, trees, semi-permanent structures, graves and other items common in the District. The rates are compiled and annually, reviewed by the District Land Board under the supervision of the Chief Government Valuer. They are based on replacement values/or prices of such items in the District as guided by section 77 of the Land Act 1998 and section 24 of the Land Regulations, 2004.
What about buildings; how are they valued?
Buildings and other structures are inspected, measured, described and recorded in the compensation forms. Permanent buildings are assessed at replacement cost or at market value while semi-permanent buildings are assessed at replacement cost according to the District Compensation Rate.
How does someone know that the Valuer has recorded the right information?
The valuation is done transparently. At the end of data collection, the property owner will be asked to witness the information gathered and recorded by appending his or her signature. The LC1 and another witness will also append their signatures on the data collection form. If there is a disagreement, the Valuer should be able to address it before the owner appends his or her signature. When all is fine, a copy of the assessment form will be given to the owner to keep for future reference.
What happens after the assessment of land/property?
After the assessment exercise, the forms are taken and all the information is entered in the computer. Valuation is done and a draft report is submitted with supporting documents to the Chief Government Valuer (CGV) for comment. The CGV then visits the assessed property, inspects and verifies the claims before the compensation award is approved.
What happens after the approval of the compensation report?
Upon approval of the compensation report, the acquiring entity discloses to the property owner how much has been assessed. They will also explain to the property owner how payment will be made and what the owner needs to do. In case the owner is not satisfied with the award, the disclosure team will explain how it was arrived at. If the owner is still not convinced, his complaints will be recorded and examined on a case by case basis. Those that require revaluation shall be forwarded to the valuation team for reconsideration.
Can a property owner harvest assessed crops and salvage materials from an affected structure/house?
In certain circumstances a property owner may be allowed to salvage materials that have been assessed for compensation. However, if such materials or crops are not removed within the stipulated time, the acquiring authority may without further consideration take full possession of the land. For crops, the entire garden may be cleared. Similarly, the right to salvage material may also be restricted by the acquiring authority. In either case, the owner will be rightly informed.
Is the property owner given enough time and money to resettle upon compensation?
Compensation is not meant to make the affected person better or worse off than they were before disturbance. A land / property owner is given a disturbance allowance depending on the time given to vacate the land/property. The Land Act requires that the owner be awarded a 30% disturbance allowance as bonus over and above the total assessed value if he or she is given less than six months’ notice to vacate the land upon receipt of compensation. If it is more than six months, the disturbance allowance is 15%.
What are the other available options to cash compensation?
Resettlement is another available option to cash compensation. In this case, the land owner will be moved and resettled on an alternative land of equal value as the acquiring authority may determine e.g. the option adopted for some people on the proposed refinery land in Kabaale parish. Another option is to exchange the land with another similar land that is already acquired by the acquiring authority. All these options are supposed to be disclosed to the affected land owner during the acquisition process before compensation.
How is communal land valued?
Communal land is valued with full involvement of the community just like other informal land rights. However, the affected communities are advised to form communal land associations for the effective management of the communal resource. Examples of communal property include hunting grounds, grazing land, water sources, burial sites, places of worship, etc.
What is Government doing to ensure organised development and land use in the Albertine Graben?
The Albertine Graben was declared a special planning area during 2010 and emphasis has been put on physical planning of municipalities and other towns in the region. Plans for Buliisa Town Council together with, Sebugoro in Hoima District and Butiaba in Buliisa District have been prepared. The Ministry of Lands, Housing and Urban Development (MLHUD) has also prepared physical development plans for the area around the refinery in Buseruka Sub-County, Hoima District. In addition, MLHUD has developed a land use plan for the entire Albertine Graben.
F. EDUCATION AND TRAINING
The following are responses to questions related to community and local government concerns about literacy, limited education, training, and teacher welfare that limit benefits from Uganda’s oil and gas sector.
What kind of training does the oil and gas industry require?
The oil and gas sector require certain specialized training especially for those ones who are involved in core scientific activities. The core scientific activities require people to undertake petroleum geoscience studies while majority of the scientific jobs are for technicians who have undertaken a diploma courses in various fields including but not limited to welding, electrical installation, construction among others. Critical to note is that to work in the industry requires that one should be certified in some of the course to match in international standards required of the industry. Other professionals such as accountants, auditors, economists, administrators and communication among others also work in the oil and gas industry.
Where is oil and gas training in Uganda?
Makerere University and Uganda Petroleum Institute Kigumba are the two public institutions offering training in oil and gas. Makerere University currently offers both Bachelor of Science (BSc) and Master of Science (MSc) in Petroleum Geosciences while Uganda Petroleum Institute Kigumba offers a two year diploma in petroleum studies. Other private institutions have also commenced offering oil and gas related training.
If many people rush for oil and gas related courses won’t it render some of them unemployed?
This is true, just it is the case with any other profession, some people get jobs while others fail to get jobs. This should however not discourage parents form taking their children for oil and gas related course though it is a good idea that some people train in other fields because like we have already seen, the sector employs a multiplicity of professions.
G. EMPLOYMENT
The following are responses to questions related to community and local government concerns about job opportunities and employment practices (recruitment, terms, rights, affirmative action) in Uganda’s oil and gas sector.
Are jobs readily available for those with training in oil and gas?
Jobs are available but on a competitive basis, therefore it is not guaranteed that whoever has training in oil and gas gets a job. Like any other sector, the oil and gas sector cannot absorb all qualified people and it suffices to note that the oil and gas sector is not a mass employer.
How can one get a job in the oil and gas sector?
There are both technical and non-technical employment opportunities in the oil and gas sector. These opportunities are for qualified geoscientists, engineers, economists, accountants, social workers and casual labourers, among others. Skilled opportunities are advertised in the media and people hired on a competitive basis, this gives every willing and qualified person the opportunity to compete for the available jobs and only those who emerge as the best are hired. The unskilled jobs in the sector are normally given out to people in a given area where there are operations and they are offered based on recommendations from community leaders in the areas where the operations take place. Available casual jobs are in most cases communicated by the oil companies to the communities during community meetings. Suffice to note that the oil and gas sector is not a mass employer but offers more opportunities in service provision and spill over benefits through other sectors such as manufacturing, transportation, construction, hospitality, ICT and clearing and forwarding, among others.
How many jobs are available in the oil industry
Although the oil and gas industry is not a mass employer, it will require thousands of workers at a time when activities will be at peak specially during field development, however, these jobs wil reduce drastically when the industry starts operating at a plateau. These jobs will be for engineers of al types, petroluem engineers and scientists, mechanical and electrical techniciansand craftsmen. An industry baseline study that was undertaken projects the following manpower demand:
Does someone need to pay for job in the oil and gas sector?
No one should pay in order to get a job. All jobs in the oil and gas sector are not for sale, it is the reason why skilled jobs are advertised for everyone with the requisite qualification to apply and compete with other applicants. Even for unskilled jobs, no money should be paid to community leaders to be recommended for consideration. Paying for a job either materially or in kind is bribery which is a form of corruption and this is an offense punishable under laws of Uganda.
H. ENVIRONMENT
The following are responses to questions related to community and local government concerns about the management of waste, environmental degradation, noise and air pollution, perceived ecological instability, and environmental compliance monitoring in Uganda’s oil and gas sector.
How are environmental concerns related to oil exploration activities being handled?
Frameworks to ensure harmonious existence between the environment and oil and gas operations are in place and are being implemented. These include: Environment and Social Impact Assessments (ESIAs) which are undertaken in consultation with Government through National Environment Management Authority (NEMA) and the local communities. This ensures that any potential impacts – positive or negative – are considered and mitigation measures are put in place.
Other frameworks developed to date include an Environmental Sensitivity Atlas for the AG, an Environment Monitoring Plan, and an Enforcement Strategy together with Guidelines for Waste management and Operations in protected areas. A Strategic Environment Assessment for oil and gas activities has also been developed to ensure that environmental concerns are included in all Government Plans, Programmes & Policies.
Who monitors oil and gas activities to ensure compliance to environmental laws and standards?
The body responsible for overall management of the environment in Uganda is the National Environment Management Authority (NEMA). NEMA leads a multi-institutional monitoring team that include officials from the Directorate of Petroleum, the Petroleum Authority. Uganda Wildlife Authority (UWA), National Forestry Authority (NFA), Directorate of Water Resources Management (DWRM), and Directorate of Fisheries Resources (DFR) together with the respective District Environment Officers to continously monitor the activities.
Are the Environment and Social Impact Assessment (ESIA) reports public documents and can the community access the ESIA report?
ESIA reports are public documents and can be accessed on request by any interested person. Communities can approach the district authorities if they need a copy of the ESIA, however these documents are usually big volumes and in most cases districts dont have many copies for distribution to the public.
Can the comments from stakeholders be incorporated in ESIA?
The preperation of the ESIAs involves consulting stakeholders and getting their views, the Ministry of Energy and Mineral Development and other relevant agencies work closely with district local governments and these districts are given a copy of the final ESIA report through the District Environment Officer. The final report includes all comments and concerns raised by stakeholders and the responses given during consultations with stakeholders.
How is the waste generated from the drilling operations managed?
Waste produced from drilling operations is mainly composed of mud cuttings which are a mixture of rock cuttings and drilling fluid that contains additives like bentonite, barite which are used in the drilling process. In Uganda, Water Based Mud (WBM) has been used most often because it is more environmentally friendly than Oil Based Mud (OBM).
In the interim, waste generated from the well sites is stored at designated consolidation sites. There are four waste consolidation sites; Ngara and Bugungu for wells drilled in Buliisa district, Tangi in Nwoya district for wells drilled North of the Albert Nile and Kisinja for wells drilled in Kaiso-Tonya, Hoima district. The sites have specially designed pits in which the solid and liquid wastes are stored separately. The pits are 4 metres deep and double-lined with strong PVC (10mm thick) and concrete which is tested before being put to use to avoid any seepage into the environment. Monitoring water boreholes are drilled around the perimeter of the each of the pits to monitor any contamination.
Are there any guidelines in place on how to hande drilling waste?
NEMA issued guidelines on drilling waste disposal and the licensed oil companies are in the final stages of procuring waste handling service providers to dispose off the generated waste. The practice of consolidation prevents a situation where the waste is spread out in different locations, which would make it more challenging to manage. Worldwide the different disposal methods include land farming, landfills, brick making, road construction, among others after the waste has been treated and stabilised.
The Albertine Graben is shared with Democratic Republic of Congo (DRC); what strategies are in place to ensure harmonised development?
The Governments of Uganda and DRC (then Zaire) signed an agreement of cooperation in 1990, to allow for joint exploration and exploitation of resources across the border by either country. An addendum to the agreement was signed in 2007 to provide for how any fields falling across the border would be shared in line with the principle of unitization. This agreement allows establishment of the percentage of the field in each country and thereby determine each country’s share at the time of production. The two Governments have held discussions on the ongoing work in the Albertine Graben, exchange of technical data and visits to the Albertine Graben to understand the exploration work, among others. It is however important to note that the discoveries made in Uganda to date are not on the common border with DRC. The Governments of the two countries continue to have regular dialogue to ensure harmonious development of the resources on either side of the border. I. INFORMATION AND COMMUNICATION
The following are responses to questions related to community and local government concerns about information sharing in terms of access (supply and demand), regularity, transparency, reliability, timeliness, frequency, relevance, truthfulness, accuracy, and clarity among all stakeholders in Uganda’s oil and gas sector.
Where can information on oil and gas be accessed?
Information on Oil and Gas can be got from responsible agencies of government. The Ministry of Energy and Mineral Development is responsible for policy and licensing companies participating in the oil and gas industry. The Petroleum Authority of Uganda is responsible for regulating the day to day activities of the oil and gas sector while the Uganda National Oil Company is responsible for commercial aspects of the sector.
The Ministry of Energy and Mineral Development and the Directorate of Petroleum have websites www.energyandminerals.go.ug and www.petroleum.go.ug respectively with information on oil and gas in the country. Additionally, the offices of both the Ministry of Energy and the Directorate of Petroleum have officers responsible for information dissemination.
How does government disseminate information on oil and gas?
Government developed a communication strategy for the oil and gas sector specifically to guide and enhance the dissemination of information to the public. The strategy is under implementation and information is disseminated to the public through use of local radio and television stations by holding talk shows periodically to relay information to communities in areas of operation and across the country on topics of common interest. Community consultations and sensitization meetings are also held to interact with host communities, workshops are also held to update stakeholders like Civil Society Organizations and use of printed information. Besides, information is also disseminated through the internet (Websites and social media platforms such as Facebook and Twitter).
Can someone visit government offices and get information?
Anyone can visit government and ask for information. Government put in place a law The Access to Information Act 2005) that governs how information in its possession can be accessed. If the available information dissemination channels are not helpful, one can walk into the offices and request for more information. J. INFRASTRUCTURE
The following are responses to questions related to community and local government concerns about inadequate roads, their maintenance, and access to electricity in the oil- bearing areas of the Albertine Graben.
What infrastructural benefits does the oil and gas sector bring?
The oil and gas sector require infrastructure such as roads, electricity and water among others. This infrastructure is critical to both industry development and operations. Therefore the sector comes along with benefits of good roads, extension of electricity and water as well as health infrastructure. Communities also benefit from such developments and if well utilized, they spur development for example with good roads in the Albertine Graben, it becomes easy to transport produce and other goods to the market which enhances trade and commerce.
Are community access roads going to be opened up and existing ones tarmacked to ease mobility of people and goods?
Opening up community access roads and making them all-weather roads is a responsibility of government. It is one of the services that should be provided from tax money that government receives, however, with a narrow tax base, government has not been able to put in place such infrastructure. That notwithstanding, when oil production commences and oil revenues are properly handled and used for national development, such facilities like community access roads should be put in place to ease the movement of people and goods.
K. LOCAL ECONOMIC DEVELOPMENT
The following are responses to questions related to community and local government concerns about real and potential loss of economic opportunities, increased cost of living, reduced production, delayed income, exclusive tendering practices, and limited community preparedness to take advantage of economic opportunities in Uganda’s oil and gas sector.
How do oil and gas activities bring about local economic development?
Oil and gas operations can contribute to improving the livelihoods of communities living in producing areas by promoting the sustainable development of the often-marginalized regions where the resources are typically located. Local developmental impacts of hydrocarbons developments can be realized in the form of revenue transfers from the central government to local governments to undertake activities that lead to local economic development and also through backward linkages with the local economy by generating local employment, transferring knowledge, and outsourcing inputs locally. Additionally, oil companies ensure that their operations create value and opportunities by supporting employment, training and the local industrial fabric. They take actions to be recognized as a partner in the sustainable social and economic development of the communities and regions where they operate. In particular, they have focused on training and hiring of local staff, purchasing local services and goods and also developing infrastructure.
L. POLICY AND LEGAL FRAMEWORKS
The following are responses to questions related to community and local government concerns about a perceived inadequacy and unfairness in Uganda’s petroleum policy and legal framework and its unsatisfactory implementation.
What are the Policy and Regulatory frameworks governing the country’s petroleum sector?
A National Oil and Gas Policy for Uganda was approved by Cabinet in 2008. As part of efforts to operationalize the Policy, new legislation for the oil and gas sector in Uganda has been developed. The Petroleum Exploration, Development and Production (PEDP) Act 2013; and the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013 became effective in April 2013 and July 2013 respectively. The former repealed the Petroleum Exploration and Production Act of 1985. In addition, the sector is guided by the Petroleum, Exploration and Production regulations of 1993 which have been updated together with other sectoral laws, statutes and guidelines on Environment, Wildlife, Water, Income Tax and Land.
What is the Institutional Frame work for the Sector?
The National Oil and Gas Policy highlights the roles of the different Government institutions led by the Ministry of Energy and Mineral Development. The Ministry gives policy guidance and monitors the work of the oil and gas agencies placed under it, namely; Petroleum Authority of Uganda and National Oil Company. The policy recommends the setting up of the three separate institutions with the following roles:
1) The Ministry has a Directorate of Petroleum responsible for policy making; coordinating the development of the sector; and undertaking licensing and National Content and capacity building among other roles.
2) The Petroleum Authority of Uganda has been created and is mandated to regulate the different players in the sector, including enforcing compliance and monitoring the operations of licensed oil companies.
3) The Uganda National Oil Company was also created as a separate commercial entity tasked with be the responsibility of state participation in the licences and other related business aspects. The detailed roles of the Petroleum Authority and National Oil Company are provided in the PEDP Act 2013.
How can the National Oil and Gas Policy and the Laws be accessed?
Hard copies of the National Oil and Gas Policy for Uganda and the laws and regulations can be accessed from the Ministry of Energy and Mineral Development, and soft copies from both MEMD and PEPD’s websites ww.energyandminerals.go.ug and www.petroleum.go..ug respectively. As part of the implementation of the National Communication Strategy for the Oil and Gas Sector in Uganda, government has developed a popular/ simplified version of the policy which has been translated into eleven local languages, which can also be accessed as highlighted above.
M. PUBLIC HEALTH
The following is a response to a common question from communities and local governments about how the oil and gas sector will impact access to adequate healthcare, clean water, medical staff, and disease control.
Will the discovery of oil and gas bring adequate health care, disease prevention and provision of clean water?
The discovery of oil parse does not bring adequate health care or clean water. It is the responsibility of government to extend such services to the people with or without the discovery of oil in the country. Citizens pay taxes to government and expect such services in return. Many communities have water points such as gravity flow schemes, protected springs, boreholes, rivers and lakes. Additionally there are health centers in every sub county, health center IV at county level and some districts have district hospitals. All these are there to offer water and health related services to communities. So the benefit that oil brings is the improvement in the services offered for example extension of clean piped water to villages, having well facilitated full time adequate staff in all health facilities, stocking health facilities with enough equipment and medicine because when government gets more revenue from oil, this revenue should be reflected in the services extended to the people in the whole country. This is one way through which the citizens can benefit from the oil resource.
However, communities hosting oil activities stand a chance of benefiting especially from various health interventions initiated by oil companies in form of corporate social responsibility.
N. SOCIAL
The following are responses to questions related to community and local government concerns about the potential impact of Uganda’s oil and gas sector on local behavioural, cultural and moral standards.
What is the role of cultural institutions in managing the oil and gas resource?
Cultural institutions are critical pillars in communities for they give a people in communities a sense of belonging. With regards to the oil and gas sector, cultural institutions play an important role of mobilizing communities towards supporting sector activities and sensitizing them on how to benefit from these activities. Cultural institutions also play a role of preserving the original culture of the communities in the wake of cultural diffusion occasioned by the discovery of oil which attracts many people from other parts to look for opportunities in the oil industry. Cultural intuitions continue to perform their traditional roles of social mobilization of communities to enhance unity with a purpose hence fostering social cohesion.
What are the social benefits related with the discovery of oil? The discovery of oil and gas has social benefits it brings to communities. These benefits include local employment opportunities, improvements in extension of social service by both government which is mandated to extend such services and licensed oil companies which extend such social services as a form of corporate social responsibility. Oil companies can invest in recreation activities and sports and other activities that bring people together, this unity is essential for the development of the communities.
What social vices come with the discovery of oil?
Many people from different parts of the world come to areas with oil and gas activities looking for opportunities. As they come to these areas, they bring along with them their diverse cultures, behaviors and other practices. This influx of people of diverse cultures leads to cultural diffusion which has the potential of causing cultural erosion. Due to many people rushing to tap opportunities, there is a possibility of increased diseases like sexually transmitted diseases like HIV/Aids, Hepatitis B, and other communicable diseases.
Additionally, crime rates tend to go high in densely populated areas due to many people from different backgrounds looking for survival. Therefore, whereas oil can spur development, there is a possibility of crime rates going high in areas with oil activities.
O. SECURITY
The following are responses to questions related to community and local government concerns about human-wildlife conflict, inter/intra-community conflict, community safety, and theft of property associated with Uganda’s oil and gas sector.
Does the discovery of oil bring wars in a country?
The discovery of oil does not bring wars; instead it brings development and prosperity especially when the proceeds accruing from the resource are used properly in activities that spur economic development.
How secure are the oil wells and their other attendant installations?
Oil and gas fields are licensed to companies that operate them; these companies provide immediate security to these facilities/installations. Government on the other hand provides general security and stability to ensure activities are not destabilized. Government is in charge of overall security in all areas; security can be visible and also invisible depending on the circumstances.
Do oil and gas activities in protected areas (national parks, wildlife reserves and forest reserves) chase away animals?
Oil and gas activities in protected areas work under the guidelines provided by both the Uganda Wildlife Authority and the National Environment Management Authority. These guidelines are put in place to ensure minimum interference with park activities as well as the environment. Therefore, animals in protected areas are not chased away by oil and gas activities.
What are the measures that have been out in place to ensure there is no human wildlife conflict as a result of oil and gas activities?
Human-wildlife conflict emerges when wild animals stray and go to human settlements and vice versa. Studies have been undertaken by Total together with the Uganda Wildlife Authority on animal movements in the park and neighboring communities to establish claims that animals get stressed by oil activities specifically in Murchison Falls National Park and invade human settlements. The findings of the study indicate that the claims are not true. However, animals can sometimes move outside protected areas but not necessarily because of oil activities.
How is wildlife protected against possible negative effects of oil activities?
The guideline issued by Uganda Wildlife Authority provide for minimal noise levels in the park to void stressing the animals and in compliance with the low noise requirements, companies use silent generators that do, not produce noise and this has led to a situation where drilling activities have taken place with animals standing nearby without being threatened.
P. STAKEHOLDER ENGAGEMENT
The following are responses to questions related to community and local government concerns about deficient inter/intra stakeholder interaction, flow of information, participation, benefit, and trust; as well as unfriendly, disrespectful, fearful and hostile relations between stakeholders and unfulfilled commitments by companies in Uganda’s oil and gas sector.
How does the oil and gas sector engage with stakeholders?
Stakeholder engagement is crucial for the development and subsequent extraction of oil and gas in Uganda. The government through the Ministry of Energy and Mineral Development holds stakeholder engagement meetings with communities hosting the oil resource especially those who are at risk of being displaced to give way for oil infrastructure such as roads, pipelines, drilling of wells, central processing facilities and the refinery among others.
Besides government, licensed international oil companies undertake stakeholder engagement with communities, local and national leaders. During these engagements, the companies update stakeholders on what they are doing, what they plan to do and how their activities affect communities plus mitigation measure they are proposing. These engagements are held on a quarterly basis during off peak and monthly or weekly depending on the need during a time when activities are at peak. This kind of interaction has accounted for the success so far registered in the sector.