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Draft Sida Project Proposal Oil and Gas
Draft Sida Project Proposal Oil and Gas
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large prospective zones have been identified along the island’s west coast within the
Ambilobe, Majunga and Morondava basins, all extending into the deepwater Mozambique
Channel. On-shore oil and gas discoveries have been made in Turkana County extending to
Marsabit County in Kenya with potential offshore reserves.
In a Conference of Parties meeting for the Nairobi Convention, held in Mozambique in 2012,
the Governments of the region (Comoros, Kenya, Madagascar, Mauritius, Mozambique,
Seychelles, Somalia, South Africa and Tanzania) recognized the need for coordinated action
in the management of transboundary marine and coastal resources especially in areas
where oil and gas exploration is ongoing. The governments of the region have urged the
Contracting Parties to the Nairobi Convention, to take into account environmental concerns
during exploration and production of oil and gas, including establishing contingency plans
and mitigation measures to address negative, chronic and accidental impacts on the marine
and coastal environment. The Contracting Parties have called for collaboration with, scientific
institutions, the oil and gas industry, private sector, civil society and other partners to
facilitate the collection and sharing of information and best practices on the management of
environmental impacts of oil and gas exploration and production particularly on
transboundary resources.
It is envisaged that through national and regional collaborative action, the countries of the
Western Indian Ocean will carry out strategic environmental assessments for oil and gas
exploration and production in the marine and coastal environment, undertake a review on
Environmental and biodiversity related policies with respect to oil and gas development
(including biodiversity off-sets) and develop knowledge and information sharing and capacity
building tools.
This proposal is a response to a request from the Governments of the Western Indian Ocean
region and their partners, under the framework of the Nairobi Convention, to facilitate the
development of national guidelines to address transboundary environmental impacts of oil
and gas industry in relation to oil and gas extraction and processing; transaction processing;
and market activities that may have impacts on the land, coasts and oceans.
The oil and gas sector is a new and emerging sector with new issues and all the governments
have acknowledge that there is no resident capacity, or prior experiences in the region. The
proposed project will mainstream, review existing laws, on biodiversity and the policies
against known requirements and practices for a nascent oil and gas industry in the WIO
region. The project objective is to guide the development of the oil and gas industry in a
manner that does not degrade natural ecosystems and resources, and provides benefits to
local communities, through a concerted partnership involving the Governments of the WIO
region, the oil and gas industry, and all other stakeholders.
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region. In general, there is no specific criteria regarding globally significant biodiversity in
some of the sites.
In many instances, Strategic Environmental Assesments, (SEA) for the oil and gas indusrty or
Environmental Impact Assesments (EIAs) for the infrastructure that is required for resource
extraction, processing and transportation are yet to be undertaken. There is a likelihood that
Government revenues from oil and gas production will be earmarked for large development
programs, in particular infrastructure, rather than on measures, or tools that promote
sustainable resource use. Sida funding will go along way in supporting a process to remove
a variety of barriers – including those related to the nature of operations of the oil and gas
sectors, the enabling policy and legal environment, and oil and gas revenue allocation
policies – to allow sustainable extraction and use of natural resources while recognising the
unique biological richness, natural beauty and high ecological and socioeconomic endemism
in the western Indian Ocean. Partnerships and capacity development are key to this proposal
and are the main means through which the Western Indian Ocean region can better conserve
its biodiversity. The proposed Sida project has been designed within the framework of other
existing and planned interventions related to the Oil and Gas sector’s development in
Western Indian Ocean region , so as to clearly define Sida’s contribution to the conservation
of globally important biodiversity.
The outputs of the proposed project will contribute significantly by preventing/reducing
pressure on globally significant species in the coastal and marine ecosystems of the Western
Indian Ocean region, which contain higher levels of globally significant biodiversity, some
which are not available anywhere else in the world. In addition, coastal and marine
ecosystems in WIO region provide critical habitats for millions of migratory birds, as well as
spawning grounds for fish populations that are ecologically and economically important
throughout the Western Indian Ocean region, and their conservation will therefore provide
benefits that extend far beyond the WIO region’s borders. Protected areas that provide
critical habitat for biodiversity including the Primeiras and Segundas Marine Protected Area,
Bazaruto archipelago, the Rufiji, Ruvuma and Zambezi deltas, the Mozambique Channel,
and others, will be strengthened through policy and institutional strengthening, while
biodiversity throughout the entire WIO region will benefit from well managed and controlled
oil and gas exploration, extraction, processing, transportation including market activities.
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influenced by the East Africa Coastal Current, the Mozambique Channel Eddies, the East
Madagascar Current, the South Equatorial Current and the South Equatorial Counter Current,
to form the Western Indian Ocean Super Marine Ecosystem (WIO-SME).
Although many pristine areas remain in substantial parts of the WIO region, there is growing
pressure from the development of oil and gas sector that has the potential to cause serious
degradation to the coastal and marine environment. If left unchecked, this degradation will
erode socio-economic development gains, magnify problems associated with increased
poverty, food shortages, ill-health and eventually also compromise social stability and
security in countries in the region, some of which are listed among the least developed
countries in the world.
By mid-2012, international exploration companies had made major discoveries of on-shore
and off-shore natural gas in Mozambique in Rovuma basin. An estimated 60 trillion cubic
feet of natural gas reserves had been confirmed from Songo Songo, Mtwara, Mnazi Bay,
Ntoria, Mikindani, Nyuni and Mkuranga in Tanzania. In Madagascar, onshore discoveries of
bituminous (tar) sands and subsurface heavy oil deposits have been discovered. Additionally,
large prospective zones have been identified along the island’s west coast within the
Ambilobe, Majunga and Morondava basins, all extending into the deepwater Mozambique
Channel. On-shore oil and gas discoveries have been made in Turkana County extending to
Marsabit County in Kenya with potential offshore reserves.
Oil and Gas exploitation and production activities have the potential for a variety of negative
impacts on the environment. They induce, economic, social and cultural changes through
alteration in land use patterns, local population levels, social economic, and cultural
systems. They also contribute to increases in aqueous and gaseous waste streams which
may affect coastal and marine ecosystems due to changes in their environment through
variations in water, air and soil/ sediment quality and through disturbance by noise,
extraneous light and changes in vegetation cover. These negative impacts need to be
mitigated and addressed to ensure ecosystem integrity.
Oil exploration and development environment issues are largely regulated through the
National Environment Act and the other related regulations that prohibit degradation of the
natural environment (Water, Air and Land), and promotes the protection of biological
diversity. Specific petroleum laws, guidelines and policies that enforce/ provide for detailed
requirements for environment pollution control are however inadequate and the existing
legal framework (policies, laws and regulations) in other sectors need to be updated as well.
In many cases, human capacity and technical infrastructure in government agencies is
inadequate to handle upstream and downstream oil and gas impacts on the environment. In
addition there is insufficient knowledge about the environment and possible environmental
impacts of oil and gas exploration in the potential oil and gas areas. This calls for integrating
environmental safeguards in all stages of exploration, development and production, including
Strategic Environmental Assessment (SEA), oil spill contingency planning and stakeholder
sensitization.
In the context of these project, the objective of this ecosystems assessement component is
to prevent and mitigate the deterioration of the environment due to hydrocarbon exploration
and exploitation by strengthening the capacity of the environmental authorities in the WIO
region to regulate the oil and gas industry in accordance with the national environmental
policies. This includes carrying out comprehensive regional Strategic Environmental
Assessment with clear objectives, indicators, linkages with other existing plans and
programmes, scenarios and options, monitoring programme and its results wideldy shared
and discussed with a broad range of stakeholders. Preparation of SEA is critical in providing
guidance to the oil and gas sector and provides the basis for all other interventions. Skills
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development in SEA, EIA, waste management and ecosystem management will go a long way
in strengthening the capacity for addressing environmental aspects of upstream and down
stream oil and gas activities.
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Project results framework
COMPONENT 1: ECOSYSTEMS ASSESSMENTS
OUTPUTS INDICATORS Means of Verification RISKS/ASSUMPTIONS
1.1 Strategic Environmental Assessment Report prepared Assessment Cooperation from
(SEA) for the WIO region conducted and List of participants reports stakeholders
results widely disseminated. Number of workshops held Workshop reports
List of participants
1.1.1 Screening conducted to determine Inception workshop Report Cooperation from
the requirements for SEA in the WIO List of participants stakeholders
region Availability of financial
resources
1.1.2 Linkages established between SEA Existing Plans and Report Cooperation from
with other plans and programmes programmes on oil and gas stakeholders
reviewed
1.1.3 Geographical coverage of the SEA Proposed outline of the SEA Annotated outline
determined including key issues,
assessment methods, data needed, level
of detail needed, and who should be
consulted
1.1.4 Objectives, targets and indicators Objectives and indicators Annotated outline
1.1.5 Baseline data collected and Report prepared Contracts signed
assessed for marine biodiversity and TORs for consultants with consultants
ecosystem services ( i.e. background, MOUs with
situational analysis both upstream and participating
downstream, socio-economic values of countries
biodiversity, of ecosystem services, and
existing resource uses in marine and
coastal areas subject to O&G
development
1.1.6 Identification of alternative/options Scenarios modelling
including scenario setting
1.1.7 Impact identification, prediction
and evaluation,
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1.1.8 Mitigation Mitigation measure
developed/proposed
1.1.9 Proposed monitoring programme Monitoring programme Approval of the
and auditing procedures proposed monitoring
programme
1.1.10 Stakeholder consultations and Stakeholder consultation Agreement amongst
decision making workshops stakeholders
Report
2.1 Environmental and biodiversity related Policies reviewed and updated Review report with The relevant government
policies reviewed with respect to oil and gas for Wildlife, Coastal Forests, proposed institutions approve the
(including biodiversity off-sets), and Wetland, Coastal and Marine, amendments or recommended changes
negotiated with participating countries. Water resources management, gaps and amendments
Fisheries, Environment
management, Land use, and
Occupational health and safety
2.1.1 Existing National legal, policies and National legal, policies and Review reports The relevant government
regulations reviewed, amendments regulations reviewed and with proposed institutions approve the
drafted and negotiated with participating updated for Wildlife, Coastal amendments recommended changes
countries and presented to the Forests, Wetland, Coastal and Meeting reports and amendments
Conference of Parties for consideration Marine, Water resources List of participants
and approval management, Fisheries,
Environment management,
Land use, and Occupational
health and safety
2.2 Management plans for protected areas, MPA/reserves plans reviewed Proposed Enabling policy and legal
and relevant sector plans for the and or prepared management plan framework exists
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participating countries, reviewed and Coastal Forest Reserves documents Cooperation from
updated taking into consideration issues oil management plans reviewed Consultation stakeholders
and gas Proposed land use reports
management plans prepared
2.3 An environmental monitoring system for Indicator list Baseline data Reliable baseline data
the WIO region, with clear and agreed Baseline data collected on report available
indicators, established. indicators Regular reports Acceptance of the
Database generated from indicators by
IT equipment the system stakeholders
Data collection tools
2.4 Mechanisms for oil and gas industry Waste types identified and Report on Industry best practices
(hazardous) waste strengthened. categorised categories and available
Handling procedures composition of Cooperation between
developed wastes generated government and private
Collection and disposal sites List of licensed sector
available facilities
Staff trained (including private Draft procedures
sector) to manage hazardous for handling
waste different wastes
Training reports
2.5 Framework for compliance monitoring Compliance management Agreed checklists Willingness of operators
and enforcement of the oil and gas industry information system developed Meeting reports of to comply
strengthened including the issue of payment Compliance assistance monitoring teams Company take up
of ecosystem services (PES). provided to companies Negotiated and voluntary initiatives
Monitoring checklists agreed disclosure Commitment from
developed procedure government agencies to
Monitoring teams established Inspection and allocate resources
and regular meetings audit reports Reliable baseline data
Public disclosure procedure Training reports available
developed Compliance and
Licensed facilities inspected enforcement
and audited manual
Monitoring equipment
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procured and installed
Key personnel of government
agencies trained in using
monitoring equipment
Compliance and enforcement
manual developed
Data management systems
reviewed and improved.
Develop GIS-monitoring system
Establish and update relevant
Quality Assurance /Quality
Control-procedures and
standards
Establish PES models
2.6 National Oil spill contingency mechanism Environmental sensitivity atlas Published updated Reliable baseline data
in place and operational. regularly updated atlas of the WIO available
Equipment in place region Cooperation between
Response units established Meeting reports government and private
Staff trained (private and Functionality of sector
government agencies) equipment
Spill response
reports
Training reports
2.6.1 Mechanisms for oil spill Oil spill contigency plans Inventory
contingency planning in place, focused Response organization Training manual
on rapid response measures for Resource inventory Oil spill
biodiversity rich areas, particularly Training program contingency plan
marine ecosystems Risk assessment Meeting reports
Number of
experts trained
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2.7 Strengthening legal and regulatory Petroleum Law Legislations Delay in approvals at
framework Petroleum upstream and negotiated with different stages of the
midstream regulations participating process
EIA and SEA legal and policy frameworks Guidelines for Resource and countries
governing oil and gas contracts and Health Safety and Inadequate public
developments, and regulations governing oil Environment management participation
and gas siting agreements, upstream and developed/revised,
mid stream strengthened to incorporate
biodiversity/environmental conservation
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2.10 Mechanisms for O&G industry to pay for Voluntary biodiversity offset
biodiversity offsets (paying for conservation payments supporting
in priority marine and coastal ecosystems to conservation in priority
offset damage, including unavoidable threatened marine and
damage, done in concession areas and to coastal ecosystems (e.g.
mitigate displaced fishing effort), linked to MPAs and fisheries
Siting Agreements, Public awareness and conservation zones) agreed
education campaign regarding the impacts of upon by the participating
O&G development on marine and coastal countries, O&G companies,
ecosystems and relevant civil society
partners
2.11 Monitoring and Regulation Regulatory framework in place; Monitoring reports Lack of cooperation with
2.11.1 Oil and Gas Exploration Well executed work programs Inspection and industries
An appropriate supervisory (regulatory) with regards to Data collection, Audit reports Lack of cooperation
framework for monitoring and regulating studies, drilling, Efficient approval between supervisory
petroleum exploration programmes in relinquishment, HSE and for planning institutions
place with regards to; Data collection, costs. document Inadequate supervisory
studies, drilling, relinquishment, Health systems and
Safety and Environment, Costs enforcement
mechanism
Non qualified operators
and licensees
Lack of public and
political consensus
2.11.2 Monitoring of Oil and Gas Policy NIMES uses oil and gas data reports Inadequate knowledge
and Programs of the sector in NIMES
The National Integrated Monitoring and Lack of support to
Evaluation Strategy (NIMES) reviewed, to NIMES
incorporate oil and gas monitoring and
evaluation systems.
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COMPONENT 3: KNOWLEDGE AND INFORMATION SHARING AND CAPACITY BUILDING
3.1 Institutional Development and Capacity Capacity needs assessed Number of capacity Inadequate
Building Adequate plans for personnel building trainings budget/Financial
A strategy for the establishment/ and infrastructure held resources
strengthening existing relevant institutions development for institutions Reports of
workshops
3.1.1 Capacity Building Plans for Human Training manuals Training reports Lack of training capacity
resources, IT (Nairobi Convention Annual/quarterly
Implementation of Training Plans, including Clearinghouse mechanism) reports
IT systems (Nairobi Convention systems updated/upgraded
Clearinghouse and Information Sharing
System)
3.1.2 National Local Participation:
Skills Development for the Oil and Gas
sector: Education Curriculas, Trainers Reviewed National Curricula Reviewed Lack of qualified
Educated, Petroleum related Courses at Petroleum Geo-science and curriculum in lecturers/teachers
Professional, Technical and Crafts level, Engineering training introduced place Lack of cooperation with
Contribution to Implementation of Petroleum at different post secondary Petroleum related respective institutions
Related Training education levels. training within Lack of IT-infrastructure
Uganda and adequate facilities
and equipment
3.2 Data, Records and information
Management:
Management Systems for Petroleum GIS-system developed High quality data Rapid technological
Geoscience and Technical data, resource Relevant QA/QC-procedures available changes and
data, administrative data, incidents and and standards established and Relevant software incompatibility
accidents data, production and cost data: updated in place IT systems failures
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Improved data and records management Efficient retrieval of data QA/QC procedures Lack IT-experts and
systems. Development of procedures for in place competence
operations and records management Lack of reporting
systems procedures
3.3 Resource Assessment
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3.5.1 Capacity strengthening in participating Report on capacity needs List of participants Cooperation from
countries to monitor and regulate O&G assessment Report of relevant institutions
sector’s activities, and to monitor and Capacity building plans workshop
manage coastal and marine ecosystems, developed
specifically to determine the threats and Capacity building workshops
prevent/mitigate the impacts of O&G organised
development on (Oil exploration activities,
Extractive and infrastructure development
activities i.e. roads, ports, harbours, etc, and
midstream and downstream activities
3.5.2 Strengthen capacity to monitor and Reporting format
report on O&G sector’s activities, specifically
to incorporate biodiversity considerations
into EIAs and Siting agreements
3.5.3 Strengthened capacity of local 3-5 targeted workshops on
governments, resource management capacity strengthening
agencies, coastal communities, artisanal and At least 200 experts including
commercial fishers to fully gauge, assess local communities trained
and manage risks to biodiversity posed by
O&G industry development and work in
partnership with O&G companies for
developing plans to conserve marine
biodiversity
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Proposed budget (in USD)
OUTPUT/Activities Budget
2013 2014 2015
USD USD USD
Project coordination costs
Project Officer 50000 80000 80000
Project Assistant 20000 40000 40000
SUB TOTAL 70000 120000 120000
Project Inception workshop 80000 80000
Component 1: Ecosystems assessment
Strategic Environmental Assessment (SEA) for the WIO region conducted and
results widely disseminated.
Activities:
a) Scoping Process (Concept note, stakeholder workshop, guidelines for Terms 80000 120000
of Reference)
b) Drafting and approval of the Terms of Reference (ToR) 40000 40000
c) Procure and approve (incl. assessment of proposal from consultancies) 80000 40000
consultancy (ies) (national/international)
d) SEA Inception workshop 30000 30000
e) Baseline data collection and processing (background, situational analysis, 40000 80000 80000
mapping of existing resources and use, etc)
f) Alternative/scenario modeling, prediction, and development of a monitoring 80000 80000
programme
g) Stakeholder consultation workshops 40000 40000
SUB TOTAL 190000 440000 270000
Component 2: Legal, Policy and Institutional Strengthening
a) Environmental and biodiversity related policies reviewed with respect to oil 32000 64000 40000
and gas (including biodiversity off-sets), and negotiated with participating
countries
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i) Existing National legal, policies and regulations reviewed,
amendments drafted and negotiated with participating
countries
b) Management plans for protected areas, and relevant sector plans for the 32000 32000
participating countries, reviewed and updated taking oil and gas issues into
consideration
c) An environmental monitoring system for the WIO region, with clear and 32000 80000 40000
agreed indicators established
d) Mechanisms for oil and gas industry (hazardous) waste strengthened 80000 40000
i) Identify and categorise waste types
ii) Compile existing “best practices” for handling oily and
hazardous waste
iii) Develop framework for handling oily and hazardous waste
e) Framework for compliance monitoring and enforcement of the oil and gas 80000 40000
industry strengthened including the issue of payment of ecosystem services
(PES)
f) National Oil Spill Contingency mechanism in place and operational including 40000 120000 80000
an updated sensitivity maps
i) Complete national oil spill contingency plan
ii) Establish, develop, maintain and update the sensitivity atlas
g) Strengthening legal and regulatory framework (i.e. SEA and EIA, regulations 40000 120000 80000
governing oil and gas siting agreements, upstream and mid stream
strengthening to incorporate biodiversity/environmental conservation)
h) O&G corporate environmental management plans negotiated with industry to 80000 80000
effectively incorporate principles and implement actions to conserve
biodiversity among others
i) Work with existing initiatives to develop an overall national strategy for 40000 80000 80000
mainstreaming biodiversity conservation into development of O&G sector
j) Mechanisms for O&G industry to pay for biodiversity offsets (paying for 80000 80000
conservation in priority marine and coastal ecosystems to offset damage,
including unavoidable damage done in concession areas and to mitigate
displaced fishing effort
k) Monitoring and regulation 24000 40000 40000
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Sub - Total 208000 856000 632000
Component 3: Knowledge and Information Sharing and Capacity Building
a) Institutional development and capacity building 40000 60000 40000
i) A strategy for the establishment/strengthening existing
relevant institutions
ii) Capacity building plans for human resources
iii) National local participation i.e. skills development for the oil
and gas sector: Education Curricula, trainers educational
programme at professional and crafts level
b) Data, Records and Information Management systems i.e. Petroleum 40000 80000 40000
Geoscience and technical data, resource data, administrative data, incidents
and accidents data, etc.
c) Resource assessment i.e. setting up a resource inventory system containing 40000 120000 80000
information such as resources yet to be found, discovered resources and
reserves)
d) Capacity development programmes to conduct SEAs and review EIAs and 40000 120000 80000
SEAs, planned and conducted within relevant institutions
i) Carry out capacity needs assessment for SEA and EIA
among government relevant institutions and develop
training programs
ii) Review and update SEA/EIA guidelines
e) Capacity development programmes developed and implemented in all 40000 120000 80000
relevant institutions for areas identified as relevant/critical to oil/gas sector
based on capacity needs assessment
i) Conduct capacity needs assessments in all relevant
organisations based on agreed ToRs
ii) Develop capacity plans for all relevant institutions
iii) Develop integrated capacity development plan
Sub-Total 200000 500000 320000
TOTAL a): 748000 1916000 1422000
Operation and maintenance of equipments
Transport costs 1000 3000 3000
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Equipment Maintenance 10000 10000 2000
Sundry (communication, postage, freight, clearance, etc) 2000 2000 2000
Reporting costs (publications, printings, newsletters)
Communications products (i.e. videos, brochures, newsletters, etc) 20000 40000 40000
Printing and Other publications 80000 80000
Evaluation costs (travel, consultants fees,
Mid term evaluation 30000
Terminal Evaluation 30000
SUB TOTAL 33000 165000 157000
TOTAL a) GRAND TOTAL 781000 2081000 1579000 4441000
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