Oil projects in Africa never really for Africans

Ceremonial boats conduct send-off salutations to the vessel that shipped off Kenya’s first oil out of Mombasa on August 26, 2019. [File, Standard]

This week has seen a resurgence of calls for the abandonment of the East African Crude Oil Pipeline (EACOP) project, following the company's application to the Ugandan government for a licence to start construction. 

Uganda and Tanzania signed an intergovernmental agreement to have the commercially viable oil at the former's Lake Albert basin extracted and transported in a heated pipeline over 1,443km to Tanga Port for export. Up to 1,147km of the would-be world’s longest heated pipeline will be in Tanzania and 296km in Uganda.

The promise? The partners in the EACOP project  — TotalEnergies, with 62 per cent stake; China National Offshore Oil Corporation (8 per cent); Uganda National Pipeline Company (15 per cent) and Tanzania Petroleum Development Corporation with 15 per cent  — say energy poverty will be a thing of the past in Africa by 2030. They have vowed to drive "social-economic growth through empowerment of local communities”.

Up to $3.5 billion is needed for the project. The partners can raise 60 per cent equity financing and expect 40 per cent from lenders. Insurance is also needed. The heated pipeline will transport up to 216,000 barrels of crude oil daily.

But why would anyone be opposed to a project of this magnitude? By May, at least 20 lenders were expected to have given 40 per cent finance, and four international insurance firms had distanced themselves from EACOP.

The calls to stop the project have been loud. This week, Reverend Fletcher Harper, the Executive Director of GreenFaith International, outlined the issues for East Africa through Ugandan media. EACOP is immoral, he said.

Issues arise from the unspoken and ambiguity on the true opportunity cost. Even with the proponents' promise to end energy poverty (lack of "adequate, affordable, reliable, quality, safe and environmentally sound energy services to support development" - Habitat for Humanity), opponents ask what will become of the families, most of them reliant on subsistence farming, after their land is taken with inadequate compensation. TotalEnergies itself puts the number of those who will be relocating at 723 "primary residences" and "a total 18,800 stakeholders, land owners and land users". 

A report shared with the Associated Press last week also outlines environmental hazards besides human rights violations. GreenFaith and the AP shared that 34 million tonnes of CO2 will be released to the atmosphere every year, more than 30 times what Uganda and Tanzania emit currently, increasing Africa's carbon footprint at a time the world is moving from fossil fuels to renewable energy. 

As the controversy prevails, one may want to look back, with resource curse in mind. Oil deposits tend to be in areas usually habited by the poor.   For EACOP, with the 62 per cent stake held by TotalEnergies, where will bigger chunk of the profits go? There are many African countries where such discoveries have not benefited the majority locals but a few people. 

Meanwhile, just thinking; the Paris Agreement was signed in France. TotalEnergies is French. We are going to COP27 in Egypt, Africa, in November. EACOP is in East Africa. Signatories to the Paris Agreement want to achieve Net Zero by 2050 (maybe not Africa yet). This is also the Decade of Action to achieve the 17 SDGs. What if the $3.5 billion was redirected to the unexploited wind power, hydro power, geothermal, bio-fuel and solar energy sources!