Uganda has not exported any oil

Jul 09, 2020

It is disturbing for someone aspiring to lead a country tagging his mobilisation strategy on deception either out of sheer ignorance or simply deliberately to mislead the public.

By Amlan Tumusiime, NRM mobiliser 

Amlan Tumusiime

Last Saturday, a friend drew my attention to a radio program on one of the Kampala FM stations, which was hosting Robert Kyagulanyi, the Kyadondo East MP and leader of the People Power pressure group.

I tuned in, listened and Kyagulanyi was telling lies that the administration of President Yoweri Museveni has for a long time been secretly exporting crude oil from Bunyoro region.

It is disturbing for someone aspiring to lead a country tagging his mobilisation strategy on deception either out of sheer ignorance or simply deliberately to mislead the public.

Companies that venture into oil and gas purely do so as a business — primarily to make profit. They prioritise making enough money to meet their operational costs and still be able to take home the surplus, which is called net profit.

Profit-making has always been their source of motivation. Oil is extracted from underground in its raw form and this is what we call crude oil. Kyagulanyi alleged that the Government is secretly smuggling out crude oil on the trucks through Mombasa Port at the coast of Kenya as an export commodity.

Is this claim technically and practically possible? Is it economically viable?

The answer is no because crude oil is economically viable when it is transported for long distances and across borders through pipeline. This explains why Uganda joined hands with Tanzania to build a 1,443km-long pipeline from Buseruka in Hoima Uganda to Tanga in Tanzania.

A prominent oil and gas lawyer, Elison Karuhanga, once argued that the cost of transporting Uganda's crude oil to the coast using the pipeline, including tariff payment, could be around $20 per barrel. He further said a barrel of oil is equivalent to 159 litres and, therefore, to transport cargo of 159 litres of oil in the pipeline for a distance of 1,443km would only cost sh70,000.

If an oil company for instance decided to use a truck to transport crude oil, how much would it cost? Also look at the possible associated risks of road transport, cost of road repair and maintenance, the cost of fuel for the trucks, and their respective operators.

The average cost of fuel for the fuel tanker from Hoima to Mombasa, for instance, is estimated to be around sh5m. The cost of transporting crude oil by road, in this case, would be almost 71 times more expensive than by pipeline. Not even a crazy business mind would do such business going by the above analysis.

Uganda's crude oil is in waxy form and this alone makes it technically impossible to transport it using fuel tankers unless there is a mechanism of heating it up while on the tanker to keep it in liquid form. The pipeline being built from Buseruka to Tanga is going to be heated up to the required temperatures to keep crude oil in liquid form for easy flow.

Once the crude oil is pumped out, it will be taken to the Central Processing Facility, where it will be separated from other impurities such as stones and mud so as to allow only the crude oil into the pipeline system. Once in the pipeline, it will be heated up to ease its flow.

There is an enviroserve built-in Nyamasoga in Buliisa district and a waste plant in Nakasongola district, where these hazardous wastes that result from the oil processing activities in the Albertine Graben are transported in trucks for safe disposal.

(adsbygoogle = window.adsbygoogle || []).push({});