Sustainability and skills transfer in UgandaMarch 24, 2021
Chen Zhuobiao, president of CNOOC Uganda, talks to The Energy Year about the company’s strategic goals for its presence in Uganda and its approach to securing support from local communities. CNOOC holds stakes in the Lake Albert exploration blocks E1, 1A and EA2 and operates the Kingfisher Project (EA3).
How do you view the achievements and challenges associated with CNOOC’s presence in Uganda?
On September 16, 2013, CNOOC Uganda received a production licence for the Kingfisher Development Area (KFDA).
Before commencement of any activity, a comprehensive environmental and social impact assessment (ESIA) was undertaken to identify the social and environmental impacts of the project as well as the measures to reduce the impacts and maximise the benefits. We received the ESIA certificate for the Kingfisher Development Project on February 28, 2020.
We have so far constructed nine resettlement houses and handed them over to the project affected persons (PAPs). The remaining resettlement homes for physically displaced persons are estimated at 50, and these are to be constructed in 2021.
We constructed the 10-kilometre escarpment road that opened access to the Buhuka area in Kyangwali Subcounty for the first time. The escarpment is not only key for the KFDA project as it provides the only vehicular road access to the key project site infrastructure facilities; it has benefited the local people and changed their lives.
We have also undertaken CSR in different areas of education, health, environment and sports. To date, a total of 750 students at PLE, UCE and UACE levels have received awards for their excellent performance since 2013. The evaluation of the award programme revealed improved performance grades in the beneficiary districts of Hoima and Kikuube of over 400% attributed to the zeal of the learners to benefit from the programme.
CNOOC sponsored eight students to undertake bachelor’s and master’s courses in the university, after which the company employed them at CNOOC Uganda offices. We planted more than 10,000 trees in Kikuube as part of conserving the environment. In a partnership with Bunyoro Kitara Kingdom to promote culture and sports, CNOOC Uganda has been sponsoring the Bunyoro Amasaza Cup for seven consecutive years, demonstrating our dedication to the growth of sport in this region. In Buhuka, CNOOC’s operating area, the company has also topped up salaries for teachers and nurses to motivate their retention as the Buhuka area was previously hard to reach due to the escarpment barrier and lack of motorway. We also trained 30 welders and equipped them with necessary skills and certification to ably participate in the oil and gas industry.
Particularly worth mentioning is the support from the relevant government of Uganda institutions, local governments and especially the support from the local communities. This partnership and support enabled CNOOC to achieve all the gains including completing the land acquisition in a timely manner with fewer grievances, completing the ESIA process and thereby gaining a social licence to operate, which is the key to any project development.
In terms of challenges, since oil and gas is a nascent industry in Uganda, a lot of capacity building is required, especially in the technical fields. There is a need to fast-track the development of infrastructure including the network of roads, railways and pipelines linking the countries of East Africa.
The Covid-19 pandemic has also been a challenge, as we all know. But we believe that, as of now, everything is taking shape and we shall soon attain the long awaited FID.
What strategic goals do you plan to achieve before the end of 2021? What are the longer-term strategic pillars of CNOOC Uganda?
We are optimistic that we shall attain the FID on the commercial oil and gas production to pave the way for the construction phase in the sector.
The longer-term strategic pillars are quality and enhancement for sustainable development of the oil and gas resource. We have always put safety and environmental protection at the forefront of our business. The participation of Ugandan nationals as professionals and service providers is critical, along with eventual skills transfer.
How do you assess the progress made by the Uganda National Oil Company (UNOC) and the government in enhancing the development of the domestic oil and gas industry in the past decade?
As one of the key stakeholders in the oil and gas business, we have worked closely [with UNOC] through regular meetings as stipulated in the PSAs, a major obligation from the key parties to further enhance the development of the oil and gas business. The adoption of new technologies has enabled better assessment and will further support better recovery rates at the production stage.
Where do you see Uganda’s position among frontier markets on the African continent?
The second licensing round offering five blocks closed on September 30, 2020, and the government shall release the list of applicants soon. These rounds play an important role in attracting companies to find crude to sustain the pipeline and refinery developments. Innovations with new and improved technologies allow improvements in efficiency and cost, which shall be key for the industry.
What is your final message to regional and global investors who are looking to invest in Uganda?
Well, I can say there is a lot of potential because this is a natural resource-rich country with great people and beautiful weather. Its geographical location in the heart of sub-Saharan Africa makes it an ideal strategic base, and one that can become a regional hub for trade and investment.
The oil and gas industry is approaching the FID stage where lots of infrastructure development shall be undertaken. A lot of equipment, materials, technology and personnel are required. This is the right time for investors to undertake feasibility studies and also partner with local companies that have a presence in Uganda. They should get ready to tap into the opportunities that come along with the construction stage.