The joint venture between Offshore Oil Engineering Co. and China Petroleum Engineering & Construction Corp. is part of the East African Crude Oil Pipeline Project, which will transport oil pumped in Uganda to the port of Tanga in Tanzania for export.
But the developers face opposition from residents, as well as environmental and climate-change advocacy groups. They are also struggling to obtain $3 billion in loan financing to complete the project.
Only a few will benefit, the rest will cry,” said Nyombi Morris, a Ugandan climate activist. “The project is displacing people, can pollute the water on which millions rely for their livelihoods, and has led to many arrests and kidnappings by the authorities.”
“The harsh reality is that oil does not necessarily bring prosperity,” Morris added.
The European Parliament passed a resolution in September on “violations of human rights in Uganda and Tanzania,” calling for the suspension of the pipeline project. EU parliamentarians say the project is an affront to the fight against climate change, citing carbon emissions as a cause of worldwide calamities, such as the increased frequency of mudslides in Uganda’s Elgon region.
The importance of Africa to China is underscored by Beijing’s new foreign minister, Qin Gang, picking the continent for his first overseas visit this week. He will visit Ethiopia, Gabon, Angola, Benin and Egypt. Foreign Ministry spokesperson Wang Wenbin said on Monday that Chinese foreign ministers have started the year with a visit to Africa for 33 consecutive years.
While China currently holds the presidency of the U.N. Convention on Biological Diversity and has pledged “to build a low-carbon and circular economic system,” its oil development projects in Uganda have led to habitat loss and the killing of wildlife. The fisheries sector, which employs over 5 million people in the country, is also at risk, according to Inclusive Development International, a global human rights organization.
But Peter Muliisa, a legal and corporate affairs officer for Uganda National Oil Co., said the project “is aimed at getting people out of energy poverty, as up to 68% of people in sub-Saharan Africa have no access to electricity.”
The two largest foreign investors in the pipeline, as well as upstream extraction projects, are France-based TotalEnergies and China National Offshore Oil Corp. The project also involves Tanzania Petroleum Development Corp. and Uganda National Oil Co.
“Fossil fuels won’t be completely eliminated in the world,” Muliisa said. “It is up to us to decide how to utilize our resources.”
Chinese oil companies are pouring money into exploring for and producing oil and gas in Africa. More than 25% of China’s oil and gas imports come from Africa, which is its second-largest source of supply, after the Middle East. China’s growing demand for energy has spurred its effort to diversify the countries it imports from, and its upstream reach has significantly increased to include nearly 20 African countries. Nigeria, the continent’s top oil producer, is one of China’s biggest oil trading partners. The West African country hopes to increase crude production to 3 million barrels per day from 2 million at present, but it is struggling to reach its target due to widespread theft.
According to analysts, up to 80% of China’s crude oil will come from imports over the next 15 years, as domestic output continues to fall. But some worry that heavy dependence on one region could make China vulnerable, potentially impacting the rest of the world, which depends on China for myriad products.
“It’s important to get oil from every part of the world, including Africa,” says Kai Xue, a Beijing-based Africa business expert. Xue argues that, “Over the long term, Chinese oil and gas investment overseas [will] decline because electric vehicles and other ways of cutting back on oil consumption are taking hold in China.”
At the same time, Africa’s energy demand is projected to be 30% higher in 2040 than it is today. The Ugandan government, however, is having difficulty securing funding for a local refinery and has had to acknowledge that the project will not be completed before 2027.
Opponents of the pipeline worry that Uganda’s oil production may have a similar effect as in Nigeria, where over half the country’s oil earnings might soon be needed just to clean up the environmental damage from oil production.
“The EACOP [project] will do the same, as it slowly and steadily destroys the environment and the communities that depend on it,” Morris says.
