Uganda fishing villages benefit from Chinese firm’s oil sector investment

Published: October 08,2022

Five tiny fishing villages on the shores of Lake Albert shared by Uganda and the eastern Democratic Republic of the Congo are host to China’s oil giant, the China National Offshore Oil Corporation (CNOOC) which is drilling the Kingfisher oil field under the lake in Kikuube district, western Uganda.

Back in 2016, these villages were some of the hard-to-reach areas. According to Dismas Babihemaiso, a local leader, access to the villages from other parts of the country was either by boat or involved climbing up a 1.9 km escarpment as there was no motor-worthy road. 

It was especially a nightmare for pregnant mothers who had complications and needed to be referred to bigger health facilities, Babihemaiso added. Transporting goods to and from the villages was also costly because people had to carry their goods up the escarpment. This all changed in 2016 when CNOOC completed the construction of a paved road down the valley, opening up the villages to the other parts of the country. Local contractors have also started the process of running power lines down the escarpment, connecting the villages to the national grid.

From the top of the escarpment, transit trucks snake through, down to the CNOOC area, ferrying parts of a specialized rig that will be used to drill the oil wells. The parts are hauled from the Kenyan seaport of Mombasa, over 1,300 km away, after arrival from China. 

The rig, the first of its kind in Africa, according to CNOOC, has advanced technology which does not interrupt the ecological environment. It is not noisy and the underground extracts do not mix with the environment. This, according to the oil giant, will put to rest concerns by environmentalists that the drilling may affect fish, which is the main source of livelihood for the community. This environmental friendliness and low carbon emission are among the key tenets of China’s Belt and Road Initiative, according to CNOOC.

Chen Zhuobiao, president of CNOOC Uganda, said CNOOC operates in 45 countries where it conforms to the highest standards of environmental protection following international protocols. “We know the lake is very important and key to the local community or Ugandan society,” Chen said. 

Economists argue that revenues from the oil resource in Uganda, if properly utilized, offer an opportunity for the country to fast-track its development. CNOOC and its partners, including TotalEnergies and state-owned Uganda National Oil Company, after protracted negotiations, in February this year announced a 10-billion-dollar investment plan in Uganda’s oil sector. 

This includes the construction of a 4-billion-dollar crude oil pipeline, the East African Crude Oil Pipeline (EACOP) to transport the oil to the international market, through the Tanzanian seaport of Tanga. First oil is expected by 2025 and output is projected to peak at 230,000 barrels a day, making Uganda one of the major producers in Africa, according to the government.

While CNOOC operates the Kingfisher oil field, TotalEnergies operates the Tilenga oil field, even though the European Parliament recently passed a resolution calling for the halting of the construction of the EACOP, saying human rights and environmental concerns should be addressed. The Ugandan government said despite the EU parliament resolution, the project will go on. 

Zhang Lizhong, Chinese ambassador to Uganda, during a recent tour to the Kingfisher oil field said Uganda needs the oil to fast-track its development. “Development serves as a key to the settlement of all issues in the economic and social sectors. Uganda is a least developed country according to the United Nations, and needs development and should put development first,” Zhang said.

Figures by the Chinese embassy here show that CNOOC has so far invested over 4.7 billion U.S. dollars in Uganda’s oil sector. According to CNOOC, 2,716 Ugandans, or over 78 percent of the total personnel, have been employed at the Kingfisher oil field. Among them, 152 are employed by CNOOC while others are engaged through contractor jobs. Apart from other livelihood training programs by CNOOC, the local community also received a gravity water project. According to Babihemaiso, the villagers used to draw water from the lake, contracting diseases like cholera and bilharzia. However, with the water project, the community now has safe and clean water. 

Xinhua