What is Uganda’s plan B for oil
THE falling oil world prices, currently at $54 a barrel, is causing concern about the exploitation of our oil reserves in western Uganda. As long as oil prices remain high – it hit a record $147 a barrel in July, it is a viable proposition to explore the remotest regions for more. <br>
THE falling oil world prices, currently at $54 a barrel, is causing concern about the exploitation of our oil reserves in western Uganda. As long as oil prices remain high – it hit a record $147 a barrel in July, it is a viable proposition to explore the remotest regions for more.
But a fall in prices makes prospectors re-evaluate their exploration work.
The energy ministry which is overseeing the exploration companies does not think there is any danger to further exploration but one exploration company said Uganda’s fields remain viable at $80 a barrel, far above current prices.
We need to brace ourselves for the possibility that with the worsening world financial crisis, our partners can cut their losses and move on. It has happened before.
In 2002 AES Nile Power packed their bags after their investments in South America were hit by the devaluation of the Argentine peso. This development so distressed the company that AES had to shed its development projects in Africa and central Asia – in which they had invested millions of dollars, just to stay afloat. So do we have a plan B?
If we had our own resources it would probably not be a problem. But one of the fallouts of the global financial crisis is that donors may choose to focus more on stabilising their financial systems than commit aid to the third world. As if that is not enough, the Government is heavily committed to bridging the energy deficit, it can barely commit more money for other long-term projects.
The Kenyans are aggressively pushing infrastructure bonds to finance their road, rail and power generation capacities. And in times of global economic slowdown the activity that these developments will entail will go some way to cushioning the Kenyan economy while building long-term assets that will spur future growth.
We are not talking about it but our donor dependant model is going to have to change irreversibly in the next few years and hopefully, will see us looking more to ourselves to finance our own development agenda.
But a fall in prices makes prospectors re-evaluate their exploration work.
The energy ministry which is overseeing the exploration companies does not think there is any danger to further exploration but one exploration company said Uganda’s fields remain viable at $80 a barrel, far above current prices.
We need to brace ourselves for the possibility that with the worsening world financial crisis, our partners can cut their losses and move on. It has happened before.
In 2002 AES Nile Power packed their bags after their investments in South America were hit by the devaluation of the Argentine peso. This development so distressed the company that AES had to shed its development projects in Africa and central Asia – in which they had invested millions of dollars, just to stay afloat. So do we have a plan B?
If we had our own resources it would probably not be a problem. But one of the fallouts of the global financial crisis is that donors may choose to focus more on stabilising their financial systems than commit aid to the third world. As if that is not enough, the Government is heavily committed to bridging the energy deficit, it can barely commit more money for other long-term projects.
The Kenyans are aggressively pushing infrastructure bonds to finance their road, rail and power generation capacities. And in times of global economic slowdown the activity that these developments will entail will go some way to cushioning the Kenyan economy while building long-term assets that will spur future growth.
We are not talking about it but our donor dependant model is going to have to change irreversibly in the next few years and hopefully, will see us looking more to ourselves to finance our own development agenda.