The African continent is home to five of the top 30 oil-producing countries in the world, which means it accounted for more than 7.9 million barrels per day in 2019 (about 9.6% of world output). Although the major production declines have been stabilized between 2015 and 2019, the Coronavirus pandemic in conjunction with a production dispute between Saudi Arabia and Russia in early 2020 dramatically reduced oil prices. As a result, future levels of oil production in Africa and around the world were highly uncertain as of June 2020. Not unexpectedly, in the middle of the emerging crisis however, in addition to leading five Africa’s oil producers, Nigeria, Angola, Algeria, Libya and Egypt, Uganda has lately underlined its intention to become a major oil and gas player. And justifiably so: first oil production is expected in 2021, hitting its peak at around 200,000 bpd by 2026, making the country the fourth largest oil producer in sub-Saharan Africa. Let us remind that in 2006 the government of Uganda discovered approximately 6.5 million barrels of commercially viable oil deposits in the Albertine Graben of which 1.4 billion is recoverable raising expectations for the industry to boost competitiveness among investors and stimulate inclusive development. With a social stability with a strong cultural background, in a good working relationship with government in support to regulatory frame work incentive and political environment, numerous tax and financial breaks for investors, the refinery underway, pipeline development and one of the most cost effective options for oil extraction available, the Lake Albert region and especially the Bunyoro Sub-region of Uganda offers a real opportunity.

Βunyoro-Kitara Kingdom community based development concern

In spite of the fact the Βunyoro-Kitara Κingdom government initially hoped that the first oil would come out in 2013 the deadlines have since been changed six times to 2021. Consequently, the BKK officials raised concern over the delay by the government and the joint venture partners Total E&P, China National Offshore Oil Company-CNOOC and Tullow Oil plc to make the Final Investment Decision (FID) that could allow the immediate commencement of commercial oil production in the Albertine Graben. According to BKK Prime Minister’s Andrew Byakutaga January 2020 statement the delay in announcing the FID was grossly frustrating efforts by local investors to tap into opportunities in the oil and gas sector. The Prime minister’s concerns were reasonably expressed having in mind that the crucial projects include the construction of the oil refinery in Kabale (Buseruka) in Hoima district, the East African Crude Oil Pipeline Project and Hoima International Airport, all meant to facilitate oil production. He has however rallied the local investors and the Kingdom subjects to be patient as government and the International oil companies were doing all it takes to have the Final Investment decision taken.

French Total emerging game-changer

Nevertheless, over the short period of time, suddenly, in the middle of the global crisis, the BKK fortunes have significantly changed! On April 23th the Anglo-Irish firm Tullow Oil has signed a deal with French oil major Total to surrender all its interests in Uganda’s Lake Albert oil project for $575 million. The announcement comes after long drawn-out negotiations and disagreements, which saw talks between Uganda Revenue Authority and the oil companies collapse over the assessment of the capital gains tax that Tullow was expected to pay from the sale of its assets in the Lake Albert project. The disagreements saw Uganda and the joint-venture partners in the oil project miss the August 2019 deadline they had set for FID, prompting Total, the lead investor in the East Africa Crude Oil Pipeline, to suspend all activities on the $3.5 billion pipeline project. For Uganda the exit of Tullow could be perceived as a major blessing as the company was already struggling for financial survival, making it difficult to fulfil its investment obligations in that country. According to the experts, the industry is just currently reeling from the collapse of crude oil prices by about 55 per cent since start of 2020, while companies are scaling down investment and operations, which may cause the takeoff of Uganda’s projects delayed. However, unlike Tullow, the remaining two investors (Total and CNOOC) are well capitalized companies with strong technological capacity, and with guaranteed markets for crude oil, all of which are critical success factors for upstream investments. The two are able to take longer-term views of global oil markets and prices when committing final investment decisions expected to bring an investment of over $20 billion, despite the prevailing low oil prices.

According to President Museveni, Tullow Oil and Total’s CEOs could not have chosen a better time to announce their agreement, which will automatically catapult Uganda to become East Africa’s biggest crude producer and provide much needed income for development and good paying jobs. Current estimates by the World Bank expect Uganda to register growth rates of over 10% per annum resulting from oil production and associated activity. Most importantly, the deal sends the right signals to the market and investors, that despite the current challenges, Uganda is open and ready to do business. It is likely to have positive effects far beyond the current crisis, with ever more explorers and oil companies likely to take another look at Ugandan acreage. The deal is also a huge boost for the construction of a pipeline that will transport the crude to international markets, additionally increasing the attractiveness of oil blocks located in the south of oil producing neighboring South Sudan.

Representing the catalyst for Βunyoro Oil, the Total deal, signed at times when the oil prices are so low, surprised many as most operators are currently looking to save costs rather than invest in new projects. The investment decisions is exactly what Uganda has been waiting for taking into account that Uganda currently has an ongoing licensing round which was launched in September 2019 and will close in September 2020. Consequently, the talks over Uganda-Tanzania crude oil pipeline deal are to start soon after the talks between Total Oil and Uganda are concluded. Moreover it seems that the delay in oil production is beneficial because Uganda has been able to build its capacity, not only in activities directly necessary for oil production but also in management, supply logistics and standards areas, which hopefully could enable it to escape the oil curse that disorganized some countries.

Bunyoro’s cultural institutions setting guidelines for oil companies

The delay of first oil production has in fact enabled social impact assessment to take place. Over the past few years, traditional cultural institutions have called for their meaningful involvement in the oil and gas sector to enhance economic benefits and development for their respective communities and to protect the cultural resources located within the oil rich regions. In spite of enthusiasm triggered by the latest announcements referring to oil and gas sector, the BKK representatives kept on striving to preserve the objective, community oriented approach to oil exploration developments.

On 21st June, the three prime ministers from Ker Kwaro Acholi, Alur Kingdom and Bunyoro-Kitara Kingdom launched Guidelines to equip cultural leaders in their institutions in managing their relationship with the oil and gas companies as productively as possible. The launch in Hoima (BKK) was witnessed by representatives from cultural institutions, the oil and gas companies active in the region, the Ministry of Energy and other government agencies, civil society, religious institutions and individual cultural activists, which all recognized the important role of Cultural Institutions in the oil and gas sector in the Albertine graben, in conformity with the Constitution and relevant laws of Uganda. The guidelines, developed to protect and promote the cultural rights of the concerned communities reflect the cultural institutions’ determination to play an active role in preserving tangible and intangible cultural heritage, in ensuring sustainable development and in fostering peace amongst communities.

Cultural heritage preservation in overcoming the contemporary challenges

In addition to aforementioned cultural initiatives it is necessary to underline the Banyoro’s dedication to their cultural legacy as the basis of Bunyoro-Kitara Kingdom’s success even in such a period of crises we are facing nowadays! Symbolically the Banyoro invoke the name of national hero Kabalega in a period of challenges using a slogan Kabalega Leega (Kabalega stretch as with a bow and arrow) to emulate his strength and courage. As we already mentioned he is celebrated hero who fought against British colonialism. Kabalega ascended the throne in 1869 as the 23rd Omukama (Κing) from the Babiito Dynasty following the death of his father. He led a historic revival of the kingdom and registered several victories in reclaiming lost territories, increased food production, cattle keeping and trade given that Bunyoro was the centre of iron smelting at that time and had the Kibiro Salt Works. Kabalega’s heroics are widely remembered in Bunyoro and Africa in general and many institutions have been named after him. On 8 June 2009, Kabalega was declared a national hero of Uganda by President Museveni. It is also worth remembering that 2023 would mark the Centenary of Kabalega’s death (6th April 1923) and 170 years of his birthday (18th June 1853), the same day as the one of his grandson, the reigning King of Bunyoro Dr Solomon Gafabusa Iguru I.

Although the epidemic spread prevent the traditionally BKK Empango activities (the coronation anniversary, traditionally known as Empango, is marked annually on the day the reigning king in Bunyoro ascended the throne), the Omukama of Bunyoro-Kitara held a Thanksgiving prayer service at St. Peter’s cathedral- Duhaga as part of the celebrations to mark his 26th coronation anniversary celebrations. Here it should be noted the King has called off the celebrations, directing the Kingdom administration to concentrate efforts towards fight the virus, donating 60 million shillings towards the fight against pandemic. According to BKK Prime Minister Mr. Byakutaga statement, the facilities that would benefit from the donation are Hoima, Kagadi, Buliisa, Masindi, Kiryandongo hospitals as well as Kikuube health centre IV and Kakumiro health centre IV.

Management of the rising geopolitical risks towards future oil success

At a time when tensions are running high in the Eastern Mediterranean and North Africa, a very significant development is expected to change the balance in the Middle East. The US president announced that Israel and the United Arab Emirates have agreed to restore diplomatic relations. There is even an estimate that Abu Dhabi, in fact, announces a similar decision of Riyadh, which has formed an informal alliance with the United States and Israel to the detriment of Iran. The second country that seems ready to re-establish relations with Israel is Sudan which is the "bridge" of the Middle East with Africa. As a matter of fact during his visit to Uganda last February, Benjamin Netanyahu referred to the prospect of "normalizing" relations with Sudan.

Taking into consideration the energy and military regrouping in Eastern Mediterranean (including Israel) under the U. S. umbrella and the possibility of the African American Administration, based in Stuttgart being relocated (following the announcement about moving USA European Command headquarters from Stuttgart to Belgium), forecasts referring to the island of Crete, Greece as new African American Administration headquarters should be maybe taken account. The emerging American interest in Africa could be additionally explained in the light of possible destabilization of Egypt after which Africa could be in danger! Because if Libya is lost, Crete would be at the center of a threat from the South. Moreover, regarding the energy security terms the French penetration and military presence in the same area should be seriously examined. Because the French energy giant Total SA, representing the last surviving European oil dividend, firmly following it’s long term strategy obviously "has come to stay".

On the other side, China, the world's second-largest economy, has become Africa's most important and strongest development and trading partner in the last two decades. China's influence on the continent began to increase rapidly with the establishment of the China-Africa Cooperation Forum (FOCAC), underlying the China’s willingness to work with Uganda to implement the important issues of the two countries: to strengthen joint efforts to build the Belt and Road, to implement the infrastructure projects and to raise Uganda’s economic competitiveness. By aligning the BRI with UN’s 2030 Agenda and Uganda vision 2040 it will give wings to China-Uganda cooperation to help it soar to greater heights. China projects unambiguously create great opportunities for Ugandans. However, concerning the China-Africa oil ties, there are two opposing views. The negative one opposing and disapproving of China’s model emphasizes that the activities of China’s oil companies in Africa threaten Western interests, cause various new problems and intensify the existing perplexing difficulties in African oil-producing countries. China’s quest for Africa’s oil may indeed undermine American oil interests in the region. Moreover, Africa’s oil resources have a different importance to China and the U.S. and should play different roles in each country’s energy strategy in the future.

Considering the fact that strategy requires rapid adaptation to changing situations, the question is could the China–US dispute in a case of good management, whose indicators are already visible could potentially represent an opportunity for Uganda?