“Coming to the East African oil pipeline and the business opportunities it offers, I first declare that I have never been intoxicated by oil. Uganda discovered petroleum in 2006. It is now 15 years but the oil has not been pumped out of the ground. Yet, the economy of Uganda is growing” (Museveni, 27.11.2021).
As the history lecture and President for Life. A man who often back thousands of years in his speeches. You would think that man could reiterate or recite history correctly. However, that is apparently too much to ask for by President Yoweri Tibuhurwa Kaguta Museveni. The President who has been His Excellency since 1986. This man has no bounds, but when coming to the Lake Albertine Graben and the oil exploitation there. He should know the truth.
If not? People like me have to remind the old fella this. You can try to rewrite history as the last victor. That is what all rulers does and especially when people tend to forget what happened before our own generation. Heck, we are soon forgetting the giant tragedies of the 1990s. Because, they are so many decades behind us.
Today, I am going back nearly 100 years. To a British Fellow and who started his work in East Africa before the 1920s, as he started his surveys from the year of 1919. He started his reports in 1920 about the preliminary findings in Uganda. This is written about the Uganda Journal by B.C. Kino, which was published in 1967. Therefore, Yoweri have to try better, as the survey where they found petroleum or was in 1925, 6 years after Wayland came to the Republic.
“In 1925, E.J.Wayland, Director of the Geological Survey of Uganda, carried out a survey which confirmed evidence of hydrocarbons, including oil and gas seeps, in the Albertine Graben (Kashambuzi, 2011). This caught the interest of the British colonial government and Anglo-Persian Oil Company which agreed to a joint venture project to prospect for and produce oil in Uganda in 1926, but the plans were later abandoned during Economic depression of 1929 (Guweddeko, 2000)” (KYOMUGASHO, MIRIAM, “Oil Industry in Uganda: The Socio-economic Effects on the People of Kabaale Village, Hoima, and Bunyoro Region in Uganda” (2016). Dissertations – ALL. 613).
For the ones taking his every word and printing it without questioning it. You could easily be fooled. I cannot fact check everything and neither do I care, as this sort of speeches is reckless propaganda and for the Movement crowds, because nothing is transparent about the oil exploitation or the pipeline transactions either.
We just know there will be issues with the routes of the pipeline, the cost of production and the settlements afterwards. There will be shady dealings and corruptions scandals involved. However, at this point, the resources and the oil/petroleum could easily become an asset for the creditors to seize the day it’s produced. Since the President and the Movement has been such steady lenders for every single development and infrastructure project of the Republic during the last decade or so. Therefore, don’t expect a fun adventure or a fairytale. No, expect a dark sinister tale of depression and disgraceful attitude.
Why? Well, we know the man at the helm and his not honest about anything. He cannot even recite history correctly. Nevertheless, that is just before his time and when they we’re a British Enclave… Peace.
Today, the Government of Tanzania have together with the Government of Uganda signed off to a Host Government Agreement (HGA), also together with Total, the supposed builder of the East Africa Crude Oil Pipeline (EACOP).
Today, all the years of waiting, stalling and finding measures of taxes pays-off. We can still wonder what is basic fee structure and what is the price of taxation of the extraction of oil exploitation in the Lake Albertine basin. In the same regard, we can wonder is the specific route for the pipeline and what consequences it will have to nature, reserves and national parks. Because, the drill itself is just in the near proximity of Murchinson Fall National Park. Before it will continue or pass through other untouched areas of both Uganda and Tanzania.
There is still not answers or openness about the deals in the regards to the Uganda National Oil Company (UNOC) and the Tanzania National Oil Company (TNOC), in combination to the ownership and licences of China National Offshore Oil Company (CNOOC) and Total. Therefore, there are plenty of stakeholders and everyone wants to profit on the resources.
With both Republics signing of the HGA agreement and preparing for the Final Investment Decision (FID). The building of the pipeline and the industry can start off. This has also been stopped by taxation and the questionable acquisitions of exploitation licences in Lake Albert. Therefore, the whole Heritage and Tullow taxation case and the costs it had for Total to pay off that. Is still not shown to the public or if the Government of Uganda has forgiven the past company to give way. While Tullow surely wanted profits for their time and the valuable licences they had gotten rights too in earlier rounds.
What is also worrying to me? Well, the deals are not public. The agreements between the Corporations and the Republics are practically unknown and only mere fragments is out. Just like the power-sharing of 60% to Tanzania and 40% to Uganda. Is still not saying much, considering this will be still carved up by Total and CNOOC too, also some sort of deal with UNOC and TNOC. These will not operate on charity, but as a benefactor of the Republic itself.
The public should know this, because it is public resources, state resources and oil exploitation on public land. The companies are using licences and also the same licenses to transport the crude oil in the pipeline from Lake Albert to Port Tanga. Therefore, it is needed to get this knowledge to show the price, the agreements and the possible perks. Because, we don’t if they even have strings or not.
We should wonder why its confidential and kept a secret. The companies should also be displeased, unless they like to exploit without any transparency. Because, these deals and arrangements haven’t been made transparent or with accountability. It has been done in the chambers of Entebbe and in Tanzania. The general public will only see a fraction and not know the full extent.
That is a deliberate action by Presidents and their handlers. The UNOC, TNOC, Total and CNOOC can operate without to much scrutiny and just enjoy the cheers. There is a need to know, but don’t expect it. Since, the GoU and GoT haven’t delivered this in past, neither has the GoU showed anything from the previous deals with Heritage/Tullow. Why should they suddenly change of heart?
I don’t think so… unless there is a sudden miracle. If not … if there is a shady deal and one company feels used and will take it to an international court. Then, we will see some evidence of what went down. However, until then… we only know the bits and pieces. Peace.
Last year in September 2019, the Farm Down Agreement of Tullow Oil was supposed to be traded to Total E&P Uganda. This was a long and prolonged negotiations, as the British Tullow Oil has been in dispute of taxation and payments of fees the Government of Uganda, which was deemed as the “Presidential Handshake”.
What happen yesterday with the Financial Investment Decisions (FID) of Total, as it has taken over the stakes of Tullow Oil. While agreeing on added terms in combination with the China National Offshore Oil Corporation (CNOOC) to drill after petroleum in various of blocks on Lake Albert, also build the petroleum pipeline from Hoima to Port Tanga, Tanzania.
The Port Tanga and Pipeline agreement was sealed in 2017 between the Government of Uganda (GoU) and Government of Tanzania (GoT). That after lots of meetings and consultations between the parties. There was some who even tried to get it Port Lamu in Kenya, but that was ditched. Also, causing a rift between Dodoma and Nairobi.
Now, the next step is that Total and CNOOC is able to get a Host Government Agreement (HGA) for the East Africa Crude Oil Pipeline (EACOP) project. That was agreed by the parties in Entebbe for the territory of Uganda, but it is not sealed with Tanzania.
Though it should be in the interest to sign an agreement with President Magufuli and the CCM. Now, that they have fixed the first part and the licences to drill on Lake Albert. Total and CNOOC needs the HGA in Tanzania too. That will be beneficial for the Republic there too.
This has been a long time… the first reports of agreements and production licenses to blocks on Lake Albert in early 2000s. This was agreements being made between the government and the Tullow/Heritage and ENI as well. Which later has caused rift between the companies and the Republic, as the Oil Companies wasn’t willing to pay taxes and the Uganda Revenue Authority (URA) needed to win a Court Case in 2014 to get taxes owned paid by Tullow, as they had to cover the loss of taxes from their acquisition of Heritage Oil.
So, the news today is big. Maybe, the President got another Presidential Handshake, as the Tullow Oil Taxes case brought a lot of kickbacks. The deals sealed between Museveni and Total is a secret. Therefore, only the agreement of what it does is in public, but not the costs, the tax-grade and the limitations of it. Total and CNOOC can have gotten it for cheap for all we know.
That is something for the time to tell. Now, the Lake Albert Basin, the Lake Albert Blocks for drilling is sealed, which has been in question and awaited a verdict for years. The same has the years of a agreement for a company to build the pipeline and pay the rates for having the operation going.
Now, there is one final agreement that needs to be sealed in Tanzania. By all means, the Republic’s needs also to settle the routes, the land-acquisitions and other arrangements too. While the other HGA is necessary to get started. As the process is now moving. The initial agreements are made, but the companies still needs goodwill elsewhere to make this pop-off. This will be years in the making. As the state of Uganda is scheduling a Oil Refinery in 2023, but that depends on everything else goes as planned at this point.
And in this business, at this point, everything that can be stalled and discontinued can happen. Even, if one of the companies stops seeing the financial viability and lack of profits. Than, they might suspend and try to sell the Producing Licenses Agreement to someone else again.
I wouldn’t be shocked, if Total bails out or something. There been so many companies involved and we are still not starting production. This being in the works since the early 2000s with the modern day deals and new arrangement for petroleum activity in the Lake Albert basin. That is why I am reluctant. Because, at any given moment, someone gives way and it sto