Can Uganda strike gold with oil without losing its green heart?

As Uganda moves closer to producing its first barrel of oil in 2026, the country faces a crucial question: Can it unlock the economic promise of petroleum while preserving its environment and communities?

As Uganda moves closer to producing its first barrel of oil in 2026, the country faces a crucial question: Can it unlock the economic promise of petroleum while preserving its environment and communities?

Since the 2006 discovery of oil in the Albertine Graben—an ecologically rich region near Lake Albert—Uganda has positioned petroleum as a key driver of economic transformation. With an estimated 6.3 billion barrels underground and up to 1.7 billion recoverable, the resource has the potential to redefine the nation’s future.

President Yoweri Museveni has called oil a catalyst for industrialization and prosperity. The Uganda National Oil Company (UNOC), the state-owned enterprise managing Uganda’s commercial interests in the petroleum sector, stands at the forefront of this journey.

From Discovery to Development

Petroleum development is a complex process involving seismic surveys, drilling, evaluation, and partnerships with global oil giants. Since the Final Investment Decision (FID) in 2022 unlocked a $15 billion inflow, Uganda’s oil sector has shifted into high gear—moving from exploration to infrastructure development, pipeline construction, and production preparation.

UNOC plays a key role, managing Uganda’s 15% stake in each of the Tilenga, Kingfisher, and East African Crude Oil Pipeline (EACOP) projects, and a 40% stake in the upcoming refinery. Its mission is to ensure that oil benefits all Ugandans, now and in the future.

Jobs, Local Content, and Enterprise Growth

UNOC and its partners have prioritized local content, registering over 3,000 Ugandan companies in the National Supplier Database. More than 15,000 people are now directly employed in the sector—90% of whom are Ugandan—with thousands more indirectly and induced jobs.

Capacity building has been a major focus: over 14,000 Ugandans have been trained in oil and gas disciplines. Community-focused projects include “Keep a Girl in School,” youth skilling programs, schools, clinics, and water systems. More than 2,700 businesses have received enterprise support in the past five years.

Hoima, once a quiet town, is now thriving. Entrepreneur Sarah Kugonza shares, “Before oil, I sold maize. Now I supply safety gear to rig workers. This is our chance to grow.”

The sector is expected to generate over 160,000 jobs, directly and indirectly, and contribute an additional $8.6 billion to GDP over the next three years. Annual oil revenues could reach $2 billion, funding roads, hospitals, and education.

Sustainability at the Core

Oil development comes with environmental risks. The EACOP project has faced criticism over potential deforestation, wildlife displacement, and carbon emissions. Critics argue that the project cuts through sensitive ecosystems, including near Murchison Falls National Park.

UNOC and its partners have responded by adopting global environmental standards. The company has launched the Alliance for Climate Resilience with a plan to plant 40 million trees and promote reforestation. UNOC says sustainability is central to its strategy, aligned with Uganda’s broader policy of balancing fossil fuels and renewable energy.

Projects are designed with low emissions and carbon footprints. Initiatives to provide cleaner alternatives to biomass aim to ease pressure on forests and reduce air pollution.

Respect for Communities

Oil development has directly affected people living atop oil-rich land. In Kikuube and Buliisa districts, nearly 6,000 Project Affected Persons (PAPs) have been compensated through cash, in-kind packages, or relocation.

UNOC and joint venture partners emphasize that compensation is fair, transparent, and in line with international standards like those of the International Finance Corporation (IFC). Community heritage is also being preserved through carefully designed resettlement plans.

Farmer James Mugisa, who started a fish farm using his compensation, remains hopeful but cautious. “The oil money helped me, but I still worry about pollution,” he says.

To address concerns like his, the government has developed a National Oil Spill Contingency Plan and conducted awareness programs at national and district levels.

Governance and Transparency

UNOC, celebrating its 10th anniversary later this year, has committed to transparency and good governance. The company is a member of the global Extractive Industries Transparency Initiative (EITI), and oil revenues are managed through a Petroleum Fund as stipulated in the Public Finance Management Act.

So far, local companies have secured contracts worth $1.7 billion—a testament to the sector’s growth potential. UNOC’s efforts have helped ensure the sector maintains compliance, receives unqualified audits, and builds strong stakeholder relationships.

A Model for Africa?

Uganda’s methodical approach to oil development—taking 12 years from discovery to development —was intentional. The country studied global success stories like Norway and pitfalls from other resource-rich nations, aiming to avoid the so-called “oil curse” of corruption and inequality.

The road ahead is still long. For every opportunity seized, there are risks to manage. But with institutions like UNOC at the helm, Uganda may yet prove that natural resources can be a blessing—not a burden.

As the first barrels prepare to flow in 2026, Uganda’s choices will shape its economic and environmental legacy for generations.

In the words of a Ugandan proverb: “A single tree cannot withstand the storm.” For Uganda’s oil dream to succeed, sustainability and shared prosperity must stand together