Greed could stall Uganda’s oil and gas projects – Expert

Greed could stall Uganda's oil and gas projects - Expert
Locals in whose land the East African Crude Oil pipeline is expected to pass through expect to reap big from the project

Greed is stalling government and private sector-led initiatives on the much-anticipated production of oil and gas, according to Hans Peter Christophersen, the Trade and Energy Counselor, at The Royal Norwegian Embassy in Kampala.

Christophersen says that greedy individuals have inflated land costs and demanded huge compensation rates in the Albertine Graben almost making it difficult for planned projects to take off.

Norway through Uganda Electricity Company Limited is funding the Nkenda-Kasese electricity transmission line from Hoima. The 225-kilometer transmission line is one of the biggest energy projects to be funded by the Kingdom of Norway.

The line is expected to play a big role in transmitting electricity within Uganda and as well as exporting it to the neighbouring Democratic Republic of Congo.

But Christophersen says one of the biggest nightmares for the project is how to deal with inflated land costs driven by greed. He says while it is right for people to be compensated or their property, there should be a system to check out the greedy that want to get much higher costs.

He says government projects may not move on as planned in future if the land acquisition process continues to be dominated by the greedy few.

The government recently suggested amendments to the land law to provide for the compulsory acquisition of land for government development projects such as roads and other infrastructure. The suggestion sparked outrage, with sections of the public claiming that the government was trying to grab land.

Christophersen says while Uganda and Norway have almost a similar regulatory regime for compensation for development projects like electricity and oil sector, the situation in Uganda can be daunting for the government projects.

While the inflation of land costs in the Albertine Graben has in the past been blamed on speculators with a connection to those in government, the emerging trend is that almost every landowner in Bunyoro is demanding much higher rates than those determined by the Chief Government valuer.

One of the civil society actors pushing for land rights in the Albertine Graben told this publication that the new trend is because the landowners have been sensitized about land rights.

The source also admitted to the fact that greedy persons whose areas have been earmarked for projects like the oil pipeline, Central Processing Facility (CPF) and the refinery have been demanding much higher compensation than the market value of land in the region.

Another project that had been affected by high compensation claim is TOTAL’s Tilenga comprising of six oil fields – Jobi-Rii, Ngiri, Gunya, Kasamene-Warindi, Nsoga and Kigogole, which will be developed together via a single Central Processing Facility (CPF).

The project has a production capacity of 200,000 barrels per day of oil together with associated gas. It will have about 400 wells drilled from over 30 well pads.