Guinea minister tips Uganda on oil

KAMPALA, UGANDA | THE INDEPENDENT | Uganda is urged to focus on exploiting resources where it has the potential to generate energy that is most affordable to the ordinary person and therefore sustainable.

Gabriel Obiang Lima, the Minister for Finance, Economy and Planning of the petroleum-rich Equatorial Guinea, says that while Uganda and Africa must adopt the energy transition to cleaner and renewable sources, the countries must find where sustainability and affordability lie.

He was speaking at the 10th Energy Convention organised by the Uganda Chamber of Energy and Minerals in Kampala, organised under the theme, “Integrating Oil, Gas, and Renewable Energy for a Sustainable Future.”

Obiang said that while, for example, Uganda has favourable weather for solar energy, it can only be used for light duty in homesteads, like lighting, because otherwise, it becomes too expensive for an average person, especially to install.

Referring to Uganda’s battle with NGOs opposed to the development of its fossil fuel industry and especially the East African Crude Oil Pipeline, Obiang said Uganda could not afford not to “complete what you have started”.

Uganda’s oil and gas industry development plan includes turning oil into light petroleum gas to supplement hydroelectricity, which currently dominates the electricity generation.

Gas and solar will also be used to power the heated and buried crude export pipeline.  He wondered why pipeline projects in Uganda and Africa were being fought by the West, and yet the countries in Europe have largely developed courtesy of the developed underground oil and gas pipelines.

Okaasai Sidronius Opolot, the State Minister for Energy, said the government will continue developing its available resources to meet the ever-growing energy demand, but mindful of the environment and climate change.

He reiterated the need for more generation stations, saying that the Electricity Regulatory Authority (ERA) estimates that the demand could surpass the supply capacity in three years if no more investments were made within that period.

Uganda’s electricity demand is growing at about 10.4, according to ERA, which calls for new generation and transmission projects to stay ahead of demand, and avoid the supply scarcity like what South Africa has gone through despite its vast resources.

Okaasai says the government will continue venturing into cleaner and renewable resources on top of the oil and gas, and hydropower. “The integration of oil, gas, and renewables is not a choice—it is a necessity,” the minister said, adding, “a sustainable energy future for Uganda will depend on our ability to strike the right balance between exploiting our petroleum resources and investing in clean, reliable, and affordable alternatives.”

The Ministry of Energy and Mineral Development has a 15-year plan to have an installed capacity of 52,000 megawatts from the current 2040 megawatts, which it thinks will be necessary for the domestic and export markets.
On their part, the Chamber of Energy and Minerals called for the fast-tracking of the energy infrastructure projects, both in electricity and petroleum, but also a stricter ESG (Environmental, Social and Governance) framework.

Aggrey Ashaba, the Chairman of the Council, hailed the EACOP financial closure and the signing of the refinery agreement but called on the parties involved to fast-track the projects to ensure that the local companies that have already secured investments do not incur losses due to delays.

Ashaba also said the same about the National Content Fund, saying that its operationalisation would ensure that the Tier 2 and Tier 3 companies in the oil and gas sector, which are usually the local companies, have healthy cash flows.

It is reported that more than half of the oil and gas sector contracts went to Ugandan companies, but Ashaba says there is a need to define clearly who a Ugandan or Ugandan company is to ensure maximum benefits for citizens.

Apart from oil and gas, solar and hydropower, the government says that the mining sub-sector is key to unlocking the Energy Transition through supplying the strategic minerals required.

“As a step in this direction, the Ministry entered a Production Sharing Agreement with Sarrai Group in a joint venture with the Uganda National Mining Company for the redevelopment of Kilembe copper mine in Western Uganda,” Minister Okaasai said.

The government is advancing several other strategies, including the setting up of mineral markets and buying centres aimed at streamlining mineral trade.

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