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Angelo Izama on the History and Social Impact of Oil Exploration in Uganda

In this episode, Brenda chats with Angelo Izama, a Ugandan journalist, writer, analyst and frequent contributor on current affairs for local and international publications and broadcasters, on the history and social impact of oil exploration in Uganda.

Angelo discusses the history of oil exploration in Uganda spanning the 1900s to present, the social impact the East African Crude Oil Pipeline is likely to have on the communities on its route, the under-discussed environmental issues, and why he thinks that the Ugandan oil story will not be the stereotypical “oil curse” story.

Angelo is presently researching a book on the political economy of decision-making in Uganda’s oil sector and is a co-founder of a Ugandan think-tank, Fanaka Kwa Wote. As a recipient of several fellowships including the Knight Fellowship at Stanford University and the Open Society Fellowship, Angelo focuses on how effective public knowledge can affect economic and political outcomes in Uganda and within the East African region. Angelo’s interests have spanned national and regional security, political economy and international organisations as well as rights associated with free expression.

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*The transcript below has been generated through software, and may contain errors. Viewpoints with Brenda is designed to be heard. We strongly recommend that you listen to the episode for context and speech emphasis before quoting the text below in print.

BN (00:20): A few episodes ago, I hosted a couple of industry experts in the oil sector in Uganda to speak about how ready Uganda is for First Oil. It was quite an enlightening conversation. And over the past couple of weeks, I’ve been receiving questions about the sector generally from people who want to know more about the history of oil in Uganda and the impact that the East African Crude Oil Pipeline is going to inevitably have on communities and the environment. On this podcast, I’m joined by Angela Izama, to chat about the under discussed issues related to the East African Crude Oil Pipeline from exploration to production. Angelo Izama is a Ugandan journalist, writer, analyst, and frequent contributor on current affairs for local and international publications and broadcasters. Angelo’s interests have spanned national and regional security, political economy, and international organizations, as well as rights associated with free expression. He’s presently researching a book on the political economy of decision making in Uganda’s oil sector and is a co-founder of Ugandan think tank Fanaka Kwa Wote. As a recipient of several fellowships, including the Knight Fellowship at Stanford University and the Open Society Fellowship, Angelo focuses on how effective public knowledge can affect economic and political outcomes in Uganda and within the East African region. So welcome, Angelo, to the podcast. 

AI (01:45): Thank you very much. Thank you for hosting me. 

BN (01:48): For the longest time I was under the mistaken impression that oil exploration began two decades ago until I spoke to you. Could you tell me a little bit more about the history of oil exploration in Uganda.

AI (01:59): The interest in oil in Uganda actually did not originate from Uganda. This was the result of Uganda being a colonial territory, and the value of oil being important to the global powers at the time, Britain being our overlord. And particularly for Britain, that oil had come to replace coal for running Britain’s ships and war vessels. So, the Admiralty in Britain, or the United Kingdom, for that matter, decided to pass a law in England that made oil, first it was coal. But then they made oil subject to the crown. And so, this came down through to the colonies as policy that anywhere in the British dominions where there was oil, that oil would be reserved for the crown. And there’s very interesting back and forth, actually, between the colonial establishment, particularly the Secretary for the Colonies, and then the Governor of Uganda about how to bring this particular policy to bear on Uganda. 

AI (03:18): Since Buganda was the seat of the colonial government, they decided ultimately, not to pass a law and subject the Kabaka of Buganda to these terms, because the 1900 agreement was seen as an agreement between equals. But the British, by that time had already come to the conclusion that the oil wasn’t in Buganda anyway, it was in Bunyoro. And that particular realization, because oil exploration had begun, basically, soon after the 1900 agreement was signed a decade after. And the first exploration license was issued to a guy called Brittle Bank in 1913. And one thing that is useful, I think, in the case of Uganda, is that both the British government and the first Director of Petroleum, who sat at Entebbe called E.W. Wayland had decided that the commercialization of oil would wait until the government itself as the British authorities, and then later it became a policy of the post-independence government. That commercialization would wait until the Ministry of Energy, or the Department of Geology, Survey and Mines had done the work to establish the quantities of oil. That served Uganda well, because when they got into the 1990s, when exploration was ramped up, suddenly, Uganda was in a position where it had a bit of expertise, having done its own work, and therefore took over stewardship of oil exploration and didn’t leave that aspect entirely to the exploration companies.

BN (05:00): Interesting. So, at what point did they discover that the oil was in Bunyoro?

AI (05:07): The oil in Bunyoro was first observed in recordings by colonial officers who, going over that area, the initial ones had simply heard that the open seepages in some of the hills and Bunyoro were brown stuff would come out of the ground and locals said from time-to-time fires would break out, you know, as if by miracle. And so, the colonial authorities were pretty diligent about it. So, they eventually figured out this is oil and then dispatched a couple of experts, geological experts to try and establish the nature of the geology of the area. And whether or not it was possible that oil of substantial quantities would be available in that location. 

AI (05:55): And a couple of studies were done. The initial oil in Uganda report was issued to potential oil companies at the time, such as the Anglo French East African Exploration Company Limited, I think, and that famous Iraqi Oil Corporation that dominated oil in the Middle East at the time, and that was issued in 1922 by Wayland, but later in the 1950s, was also updated with another report. So, you know, you have got essentially, two oil in Uganda reports, which are a comprehensive study of what was known about oil in Bunyoro at the time in the period prior to independence. And then later, after independence, exploration continued. And the Department of Geology, Survey and Mines, issued an annual update, actually, almost every year, until 1978, I believe, was the last year there was a report issued. But exploration activities declined somewhat during the many years, the way again, picked up after the war of liberation in 1980. The post-liberation government, especially after the 1980 elections, the new UPC authorities, were desperate for money to do you know, spending on economic recovery and social spending. So, they actually prioritized the oil that was in mineral and mining in general. 

AI (07:34): So, under the second UPC administration, there was the first sign that oil was going to be commercialized at the scale we’ve seen in other countries like, you know, Nigeria, and, and the rest. But of course, that was interrupted by the civil war in Uganda. Of course, as a lawyer, you know that the Petroleum Act that remained in place until 2014, was passed in 1985. The Act itself was basically to prepare you kind of oil, deepening oil exploration and production, and also was meant to cover the activities of companies that the UPC government was in touch with, ironically, including French companies that would allow it to commercialize oil. 

BN (08:21): So, in terms of present day, right now, where is the oil located?

AI (08:26): Almost all the oil is located in the Albertine region. And that kind of straddles the western border way into West Nile in Uganda. The bulk of the oil is covered in parts of Nwoya and Amuru, that’s where much of the juice is. And then way down to Bunyoro area, so Hoima. So where today, the government has located the International Airport and has planned the central processing facilities, the location for the refinery is because those are areas adjacent to the oil fields, which are around the Lake Albert area, moving up towards the north. 

BN (09:10): The history is really quite interesting. Do you think that there’s been enough sensitization and planning around the social impact that the pipeline is going to have on the communities on its route?

AI (09:23): I don’t know. My sense is that if you choose to build an infrastructure, yet unseen, you can’t determine what kind of impact it will have down the road. It’s like a road. If a road cuts through a wildness, you can’t quite tell what is going to happen. The nature of public infrastructure is that it changes the lived reality of everyone around it. And in the case of the pipeline, building pipelines, basically breaking the ground and to break the ground, you need bulldozers and other heavy earthmoving equipment, and what the impact on the societies is, is workmen all along the pipeline route. The land has been acquired and the communities pushed outside the perimeter of where the pipeline is going to pass. It’s more like a road project. In the future, the communities remain excluded, so that the pipeline is undisturbed. And so, it will be there. But for most of its journey, it’s going to even be a submerged pipeline, so in other words, this will be under the ground or in the water. So, we won’t see it physically. 

AI (10:29): But the way I see the social impact being discussed is one on land compensations. So, if you didn’t move the community outside, what does that mean? They’re giving up their land — was it a fair bargain, was there fair land resettlement policies that have been applied. Over the years, the approach of both banks that finance these kinds of projects, and their social impact have been upgraded so that what is available today in the 21st century is quite different from what happened in the 19th and 18th centuries about land for this kind of projects. So, Uganda is no different. In fact, the oil companies tend to have slightly higher standards, because their banks demand it. And insurance companies. There is that aspect of, okay, if you get a block sum of money for your land, can you take the market value of that money and purchase similar land elsewhere. Civil society organizations that have looked at this initially, at least between say 2010 and 2016, were of the view that communities didn’t quite understand what it would mean giving up their land, and that the money that they got the bargain that they got, might not be able to tide them over if they went and got land elsewhere. And so, for a while, the recommendation was land for land instead of land for money. You give up this line, you get a piece of land elsewhere. So, these disruptions very much alive. And we’ll continue.

AI (12:08): The other elephant in the room, and I say elephant, because essentially, actually elephants, they’re the largest creatures that dominate that the wildness in that area, is one of the environment. So, there are heritage centers around Lake Albert, around Kyoga and the estuaries there, that were protected lands for the last 40 years. There is very unique bird population. Unique is an understatement. It’s only one of such clusters of bird migration routes in the world that is in that area. There’s of course, the lake system, which in Uganda is not something to speak of lightly, because our integrated lake system also ultimately provides the water resources for the world’s longest river, running river. So, River Nile draws its water from tributaries and underwater systems in that entire area. And as you can imagine, the importance of that river to downstream countries. So, they environment I think, is the big sticking issue as far as the social impact of Uganda’s oil activities are concerned. And my sense is that, you know, it’s not as well discussed. Because ultimately the protection of the environment including the protection of the animals in the parks, the water resources, the fish, other flora, and fauna are going to be the real test as to how well this particular oil production operation is carried out.

BN (13:43): Yeah, and slightly on the environment. Is there any impact that oil has historically had on land use in Uganda?

AI (13:52): Mineral and oil exploration has had an impact on land use, but that’s mostly because the land has been reserved for these activities. I’ll give you an example. 68% of the landmass of seven districts that make up Karamoja is basically reserved by the government as protected areas. There are parks, but they are also mineral exploration areas. So, if you take the mineral exploration areas gazetted areas, you add the areas reserved by the Wildlife Authority, the National Forestry Authority, and others. I think you may have only 28% of land in Karamoja overall available for habitation and farming and other things. You can imagine this is very radically different from where Karamoja was, say 60, 70 years ago, when the people in that area could roam freely across you know land, it is a pastoral community they could roam freely. So that’s just a snapshot of the nature of in which these activities interact. 

AI (15:02): But if you come to Albert, the Albertine region. Historically, the interest of oil by the British authorities and the post-colonial government has meant that the Bunyoro area has been, you could say, within the government’s radar. So, there’s continuous civil service surveillance of what’s going on in Bunyoro. Of course, it’s not always been a very good history. The most vicious wars of attrition fought in British colonial history was fought, you know, between Chwa Kabalega and the British authorities. In fact, the scorched earth policy that has been applied in other parts of the world, most recently Northern Uganda with the Northern Uganda war you could say, was pioneered in Bunyoro, by the British to deny Kabalega and his supporters any ground. So Bunyoro was devastated by that war. And then later, of course, because Bunyoro is under this kind of surveillance there’s exploration activities that are going on and so forth. My sense is that the planning for these areas, has always had oil at the back of the activities of government officials. The way the government has approached the political economy in that area. As you know, when oil was discovered, a Ministry of Bunyoro Affairs was created to take care of the state-society relations in that place. Where the government has gazetted areas for exploration, so exploration acreage, it also has to guarantee whoever is the successful concession winner, that they can do the activities there uninterrupted. So that means that there’s a security blanket in those areas. And ultimately, it leads to interruptions of one kind or the other.

BN (16:59):I’m excited to learn more to see what’s happening in the sector. And I wanted to thank you for coming on to the podcast and just answering some of these questions that we’ve been receiving over the past couple of weeks. 

AI (17:12): I want to say something finally about this long-suffering book that I’ve been writing.

BN (17:17): Yes, please.  Go ahead. Please.

AI (17:19): Also, because of the unique place of Uganda, in the recent history of oil exploration, oil discoveries, as you know that Africa and several other third world environments have been defined as being generally cursed by oil, as if by design. In Uganda’s case, a couple of unique things, which will go into the book. One is the extreme delay between when oil was discovered in this period we were in now, that’s like in excess of 15 years. Most countries that discover oil, often that go generally in the direction of the bad news, such as Nigeria, or Equatorial Guinea, or Angola. They tend to take their oil to the market pretty rapidly within a period of about four to five, four to six years upon discovery of oil. In fact, the period I was referring to when Uganda decided to upgrade is oil governance legislation between 2012 and 2014, the Nigerian oil industry had been operating, you know, basically for 40 years, and they hadn’t upgraded theirs. So, we had not sold, neither had we been pumped a single barrel of oil for sale when we upgraded our oil legislation. While Nigeria that has been producing since the 1960s and 1963, when Uganda just got her independence, just I think the last four years, and it’s not complete, have upgraded their oil legislation.

AI (18:58): So, Uganda is a country of contrasts and the political story there is interesting, which fascinates those of us who study the country. One of the questions is, if you needed oil so badly, you are, you know, taking in debt, you are financing large infrastructure projects, your country has been tagged as autocratic or illiberal, and therefore falls in the category of countries that typically would take the oil and finance large patronage systems and what. Why is this oil sector basically, not following that path — is one of those questions that I’m trying to answer. That is a long way of saying that some of the expectations about where Uganda is going to go with oil will not fall neatly into how we understand oil in Africa, is what I’m saying. Even now, I think that most people are sort of behind the curve and the conversation for the general public is all you know, this oil has taken forever, it may not happen, has the final investment decision been taken. If you look at what is going on in the sector proper, there are hundreds of companies that have been assembled under the national supplier database, many of them are bidding now, for the initial contracts. The nature of oil is mostly that the benefit of oil is in services. The money that is going to be spent of the 15 billion in investments is essentially going to go into services that allow the oil companies to do what they’re doing, which is recoverable later, when they sell their oil in the open market.

AI (20:41): I’m afraid that most people will wake up to the realization that there is nothing particularly special about the oil sector. Truckers, people who are supplying food, certain sections of Ugandan human resource which have already been absorbed into this oil. And those entrepreneurs who have already taken a risk on it will have already started making their profits before the conversation begins to take shape as to how oil is impacting the country. This particular oil environment is of such an understated quality that is almost as if there is a conspiracy of silence about some of the aspects of oil in Uganda. For example, the fact that oil exploration has been carried on for decades. It was not a public discussion. There are people who are in the oil sector proper themselves who when I tell them, look, oil studies and the oil maps that you’re using, are essentially more than 60 years old, and we produce these maps and they’re like, oh, we didn’t know this was going on? How is it that we did not know that stuff has been going on right and under our noses? Uganda’s oil story is going to be a really mixed bag. And that a lot of it even stands in contrast to what’s happening in the, in other areas of the Ugandan political economy, including, of course, the fact that our regulators are generally not as good at regulating and that our entrepreneurs are largely a state-based sector. So, there is going to be some surprises. And I put my neck out, you know, over a decade ago to say that Uganda will not be a typical story of the standard oil curse. But what it is exactly going to be something that I do not know. But like you, I’m just excited, and I’m waiting to see what happens.

BN (22:42): Yeah, thank you so much, Angelo. I appreciate you coming on.

AI (22:46): Thank you for having me.

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