Uganda’s oil interests should take precedence

Jul 12, 2009

THE prospect of huge revenues associated with the projected export of oil has caused palpable excitement among Ugandans. The June 29 publication of The East African did not help matters in their lead story titled: “<i>Can Museveni be trusted with oil mo

By Pamela Ankunda

THE prospect of huge revenues associated with the projected export of oil has caused palpable excitement among Ugandans. The June 29 publication of The East African did not help matters in their lead story titled: “Can Museveni be trusted with oil money?”

The story painted a bleak picture with annoyingly very minimal reference to the institutional and policy frameworks for the development of the oil industry.

This, among other stories in the media like The Independent’s, “Oil Secrets,” is premised on the wrong assumption that there is a deliberate refusal by the Government to make public details of the Production Sharing Agreements (PSAs) it has entered with the companies prospecting for oil. Shortly after The Independent, carried what they described as an under cover story titled “Oil Secrets”.

In 2006 when President Museveni announced oil prospects, he pledged to use the resources gained from oil production to fund development in the country. To appreciate the dynamic of ‘oil politics’, I would recommend two must-read books “Confessions of an Economic Hit Man” by John Parkins and Next Gulf by James J. Forest and Matthew V. Sousa; both exceptional and fantastic books that help one understand the politics of oil.

We understand that the Government’s reluctance to commit to the Oslo-based Extractive Industries Transparency is not without premise. I am also aware of the fact that as recently as mid June 2009, cabinet was still scrutinizing the proposed law on the sharing of oil proceeds; and we are eagerly waiting on that. The Government recognises the need for transparency. But it can be annoying that calls for transparency do not even refer to the institutional and policy frameworks already in place to guide the oil industry.

The National Oil and Gas Policy was the first major step to promote transparency and accountability. It addresses issues of licensing, procurement, exploration, drilling, development and production operations; as well as management of revenues from oil and gas. Besides, the pending oil bill is an issue of Parliament, not President Museveni. What The East African described as ‘the appropriate nationalistic posture about the future of Uganda’s oil programme and the apparent satisfaction by donors with key aspects of the national oil and gas policy’ is in the bill.

Critics would do better to differentiate President Museveni’s personal interest from national interests. The various demands from western oil companies that call on Uganda to export crude oil should be scrutinized rather than being given ‘smooth’ media coverage in Ugandan press.

They (western oil companies) have questionable interests; the kind that Chevron would like to forget quickly. President Museveni is protecting Uganda’s interests in maintaining that the refinery must be built here. Uganda’s oil is said to be among the best in the world because it has very low contents of sulphur which apparently reduces the costs of refining the crude oil.

Let us face it, the management of oil and gas is a political issue and there is a risk that we will get pulled into a political debate. The politics of oil is very difficult to understand; Nigerians would testify to that with Sani Abacha (RIP) allegedly making sure he saved almost a million dollars everyday for God knows what. We have an opportunity to make sure that Uganda’s oil and gas revenue is effectively reserved for Uganda and her people.

The starting point is self-consciousness. The point is: We should recognise the reality of regional geo-politics since Uganda is likely to be the first country to produce oil in the East African region. Granted, there is a need for transparency in the sector. But even when we have been made aware that the Petroleum Act has been in place, little or no reference is made to it.

One may be tempted to think that the media’s challenge is the lack of understanding the industry jargon. And so we get caught up in the confusion of ‘geophysical, geological, geochemical’ surveys of the “Albertine Graben, trying to acquire “seismic data” and “hydrocarbons” of how many quantities of barrels.

Consider the example of an article published in The New Vision June 4, 2009, that ‘the seismic processing for EA5 revealed that the Miocene sediments prevalent… have a maximum thickness… in line with sediments in EA1…’ or, drilling of the appraisal well to “calibrate enhanced seismic data’.

A quick search of almost all Ugandan publications in the last two years shows that either deliberately, or not fully able to translate that information into understandable terms, the main story has been “oil well discovered”, “more oil found”, “transparency needed” “drilling”, exploration, processing, flow testing and other terminologies that I doubt, we all fully understand.

A starting point is therefore, to visit the petroleum library in Entebbe, where all public information is available. We make dishonest citizens of ourselves if we expect to find such information on the streets. And lest we forget, there are other natural resources that Uganda is richly blessed with, but civil society groups are not as loud on those as oil.

The writer works for the Uganda Media Centre

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