Pearl Sweet: Uganda’s oil must be planted, not sold
Ssenide says the President chose a slower path and was criticised for it. Laws were passed first. The Petroleum Authority of Uganda was set up to regulate the sector, and the Uganda National Oil Company to hold the country’s stake. Those who complained about the delays should remember that a pearl takes time to form.
Dr. Rosemary Nansubuga Seninde
By Hon. Dr. Rosemary Nansubuga Seninde (PhD)
Between July and September, ExxonMobil, Chevron and Shell made more than US$37 billion in profit, and much of that windfall came from refining crude, not just pumping it. That is the very lesson President Yoweri Kaguta Museveni has been preaching for years.
On September 2nd, standing at the Kingfisher oilfield in Buhuka, Kikuube District, he gave our crude oil a name: Pearl Sweet. A name gives a thing an identity and an owner. With that name, the President told the world, and us, that this oil belongs to Ugandans and has a job to do.
The name fits. Our crude has little or no sulphur, which refiners like. But the sweeter part is the road that brought us here. It has taken twenty years of patience, hard bargaining and a stubborn insistence that Uganda’s oil would be developed on Uganda’s terms.
Oil in commercial quantities was confirmed in the Albertine Graben in 2006. Many expected us to start pumping and selling straight away. Elsewhere, oil came before the institutions were ready, and what followed was conflict, theft and poor people living on top of great wealth. Economists call this the resource curse.
The President chose a slower path and was criticised for it. Laws were passed first. The Petroleum Authority of Uganda was set up to regulate the sector, and the Uganda National Oil Company to hold the country’s stake. Those who complained about the delays should remember that a pearl takes time to form.
His thinking is clearest on the refinery. He has said he did not support the export pipeline at first. Why, he asked, should we send away a resource our own economy needs? He agreed only when it was settled that a refinery at home would get first call on our oil.
Value addition is not just a slogan. A refinery means fuel made at home. It also opens the door to petrochemical factories.
The farmers in Hoima, the trader in Kampala and the truck driver in Gulu all stand to gain when our oil is processed here. Processing at home also guards against what economists call Dutch disease, where an oil boom strengthens the currency and quietly hurts farmers and manufacturers.
Some of the benefits are already with us, before a single barrel has been sold.
TotalEnergies reports that nearly 16,000 Ugandans have worked on the project and over $795 million has been spent locally. These are welders, drivers, cooks, engineers and suppliers earning a living.
In June, while in Kikuube on NRM mobilisation duties, I visited the Kingfisher oilfield. The central processing facility, built to handle 40,000 barrels a day, was nearing completion. At Tilenga, 234 wells had been drilled by the end of June.
The 1,443-kilometre East African Crude Oil Pipeline to Tanga, Tanzania, had reached 91 percent completion by early August.
When the oil runs out, what should remain are the roads, power lines, schools, hospitals and factories it paid for, and the skills it built. Norway understood this. It saved its oil earnings in a fund now worth well over a trillion dollars, and Uganda’s Petroleum Fund rests on the same idea.
That is why training our youth matters.
The Uganda Petroleum Institute Kigumba is training technicians and specialists so that oil jobs go to Ugandans. The real wealth from Pearl Sweet will be the skills of the young men and women who work on it.
We must also get things right on the ground. Albertine communities must be treated fairly and given a real share of the opportunities.
The lakes and parks around the oilfields, among Africa’s most beautiful, must be protected. Oil that divides communities or destroys the land would be a curse, not a blessing.
As we move towards first oil, nobody asks any more whether Uganda can produce oil. The question now is whether we will plant what it earns or simply eat it.
We owe a great debt to President Museveni. For twenty years he has held firm against the pressure to rush, so that all Ugandans would benefit. It is now up to our generation to make sure that when the story of Pearl Sweet is told, it is the story of a country that took a gift that will not last forever and turned it into wealth that does.
The writer is the Director for Mobilisation, National Resistance Movement (NRM).