CNOOC builds sustainable value in UgandaJune 13, 2022
Chen Zhuobiao, president of CNOOC Uganda, talks to The Energy Year about the latest progress on the Kingfisher Project in Uganda and the importance of national content for the company’s operations. CNOOC holds stakes in the Lake Albert exploration blocks E1, 1A and EA2 and operates the Kingfisher Project (EA3).
Regarding the Kingfisher Project, what key milestones has CNOOC achieved and what is its current status?
Some key milestones include the passage of the EACOP law by the Ugandan parliament in December 2021, which was then followed by the official announcement of the FID in February 2022. A few days later, on February 8, 2022, CNOOC awarded four major contracts including EPC3, integrated drilling services, casing and tubulars and PC1. On February 11, 2022, the Kingfisher oilfield construction phase was kicked off, with PC1 contractor Excel Construction, to construct well pads, access roads and water intake points. On February 28, 2022, the conductor pipes were transported to the Kingfisher Development Area [KFDA].
Other key milestones achieved in the development of the KFDA project include the signing of the host government agreements between the governments of Uganda and Tanzania in 2021, which brought us a step closer to the first oil expected in 2025. The signing has paved the way for the construction of a crude oil pipeline from Uganda to the Tanga port in Tanzania.
We have also managed to attain 99% of the required land acquisition for the project, and 57 resettlement houses are being constructed for the affected persons in the three sub-counties of Kyangwali, Kabwoya and Buseruka.
We also implemented the RAP [Resettlement Action Plan] Phase 2 Livelihood Restoration projects, where we have ongoing agriculture and livestock projects supported by CNOOC for the affected people in the area of operation.
We are currently faced with the challenge of the Kabwoya-Buhuka road, which needs to be tarmacked to meet the Kingfisher development area project transportation needs and thus achieve the commitment of first oil as planned.
What are the longer-term strategic pillars of CNOOC Uganda?
Our longer-term strategic pillars focus on first oil by early 2025 and on setting the benchmark [for standards of quality and delivery] for the East African region and beyond. CNOOC Uganda Limited is committed to the efficient and effective development of the oil resource in an environmentally friendly and sustainable manner.
It is also worthwhile to note that following a memorandum of understanding signed in Beijing, China, witnessed by H.E. President Museveni in 2018, CNOOC and UNOC signed a Joint Application Agreement for the prospective Pelican-Crane block on March 30, 2022.
What is the importance of national content for the company’s operations?
As part of the commitment to national content efforts, CNOOC Uganda intends to promote national and community content efforts which are aimed at promoting and maximising value addition and job creation through the use of local expertise, goods and services, business in the oil and gas value chain and their retention in the country through education, skills transfer and expertise development.
We expect to employ over 2,716 Ugandans (over 78% of total personnel), comprising 280 people employed directly by CNOOC Uganda while 2,436 will be employed by contractors (1,581 in the EPC phases, 244 in the drilling packages, and 600 for support contracts).
For contractors, stringent clauses have been included in the contracts emphasising adherence to the obligations and commitment to national content development. In order to realise this, supplier development programmes are being conducted to enable local providers to become compliant and be able to provide services to the oil and gas sector.
What are the key environmental and social considerations regarding CNOOC’s activities in Uganda?
CNOOC Uganda Limited is committed to efficiently and effectively developing the oil resource in a socially and environmentally friendly and sustainable manner. CNOOC Uganda values harmonious co-existence with the environment and biodiversity.
CNOOC Uganda ensures strict adherence to Ugandan regulations and guidelines and a clear commitment to applying international best practices to the development of the oil resources, particularly the International Finance Corporation Performance Standards, also known for being the most stringent standards on the environment and biodiversity. Environmental and Social Impact Assessments (ESIAs) are undertaken to ensure that all the potential impacts are identified and mitigation measures developed.
The ESIA is also developed with relevant Environment and Social Management Plans (ESMPs), which clearly state the actions to be taken during construction, operation and decommissioning in order to reduce the project’s impacts to As Low as Reasonably Practicable (ALARP).
How is CNOOC going to continue driving sustainable growth in the country?
CNOOC Uganda Limited is committed to the efficient and effective development of the oil resource in an environmentally friendly and sustainable manner. The company, through its activities and programmes, is a partner in driving sustainable growth, thereby creating lasting and sustainable value in Uganda.