Progress & pitfalls, Uganda's 0il Sector, and compensation concerns

The oil and gas industry in Uganda is swiftly advancing, with significant investments from industry giants TotalEnergies and China National Offshore Oil Corporation (CNOOC).

Since the Final Investment Decision (FID) was signed by CNOOC and TotalEnergies in February 2022, oil and gas infrastructure development in Uganda's Albertine region has been accelerating.

The collaboration between TotalEnergies EP Uganda, CNOOC Uganda, and Uganda National Oil Company (UNOC) involves an investment exceeding $10 billion to develop upstream facilities and the East African Crude Oil Pipeline (EACOP).

Positive impact on communities

The influx of investment, often referred to as "petrodollars," is visibly transforming the region.

Uganda-Tanzania oil Pipeline Google

Previously underdeveloped areas are now witnessing the construction of tarmacked roads, an international airport, and improved housing.

Compensation provided to Project-Affected Persons (PAPs) has resulted in tangible benefits, including upgraded houses, solar lighting, and improved sanitation facilities.

Employment opportunities

The development projects have generated a substantial number of jobs, benefiting the local population.

Approximately 12,000 jobs have been created so far, with a focus on employing Ugandans.

Uganda discovered oil beneath Lake Albert 14 years ago AFP

As the construction of facilities reaches its peak, the job count is expected to rise to around 160,000, offering extensive opportunities for the Ugandan workforce.

Compensation challenges

Despite the positive transformations, there have been challenges related to compensation, including delays and disputes over compensation rates.

Human Rights Watch highlighted concerns about delays in compensation, leaving many affected households worse off.

Some individuals are reluctant to relocate without what they consider adequate compensation.

In July, Human Rights Watch released a report, 'Our Trust is Broken,' which documented what it described as 'devastating impacts' on the livelihoods of Ugandan families from the land acquisition process.

“Critically, Human Rights Watch found that affected households are much worse off than before. Most lands were initially evaluated in 2017-2019. Compensation was not received until three to five years later, in 2022 or 2023.

"Considerable hardship accrued from these delays that were also poorly communicated amidst confusion over the ability to access crops during this time,” the Human Rights Watch report said.

Addressing compensation delays

Recognizing the compensation delays, a 15 percent per year uplift on additional financial compensation has been implemented to mitigate the impact on affected communities.

However, there remain discrepancies in compensations received by affected individuals, highlighting the need for a more comprehensive and equitable compensation system.

Land acquisition & compensation determination

The process of land acquisition and compensation determination involves comprehensive steps, including proper identification of land, confirming the number of occupants, and determining compensation rates.

These rates, proposed by the district and confirmed by the Chief Government Valuer, aim to strike a balance between the interests of all stakeholders.

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