After nearly four years of a well-orchestrated campaign by local environmental groups and their overseas backers to block funding for the Uganda oil export pipeline by Western banks, the South African-based Standard Bank (Stanbic) is set to arrange critical funding to permit the project to proceed to full execution.
A major win for President Museveni, who has sustained strong messaging for oil investments and revenues to fund national development.
Through Stanbic and the Industrial & Commercial Bank of China (ICBC), $3 billion will be offered. The shareholders (TotalEnergies, the Chinese state oil company CNOOC, and the governments of Uganda and Tanzania) will provide the balance of $2 billion. Ugandan oil, discovered in 2006, can now reach export markets by 2027.
Since the outbreak of the Ukrainian war in 2022, global animosity against new oil production has waned. Governments and investors now accept that energy security and economic stability are critical essentials for sustainable political stability. Further, it is generally accepted that the global energy transition from oil to renewable energy will take longer as the world develops sufficient renewable capacity. This reality has slowed down global climate activism and funding, which has impacted Ugandan environmentalists.
And other parts of Africa continue to discover and develop new oil and gas resources. Namibia has the largest discovery of oil. With three major oil majors (Shell, TotalEnergies, and BP), one can expect Namibian offshore prospects to be major oil producers within another three years.
Also, the offshore West African coast has become another area of major oil and gas discoveries for quick commercialisation. Côte d’Ivoire hopes to increase its oil discoveries and commercialisation from the current production of 60,000 to 200,000 barrels per day (bpd), with major investors like ENI in attendance. Senegal up the coastline has also made oil discoveries with the anticipation of 100,000 bpd production.
Mozambique and Tanzania are forging ahead with the development of liquefied natural gas export capacity to meet growing demands in Europe and Asia, especially after the boycott of Russian piped gas by Europe.
In Kenya, which discovered oil in Turkana in 2012 with a potential for 120,000 bpd commercial production, we continue to miss major opportunities for oil foreign direct investments (FDIs), Treasury revenues, and jobs. There is no evidence of high-level executive tenacity to get value from our oil, as we have seen in Uganda. The Ugandan upstream oil sector has made Uganda surpass Kenya in FDIs.
