If you thought Uganda’s fledgling oil industry was all about Tullow, Total and CNOOC, think again. Those companies own rights to explore for and extract the resources, but their operations depend on an army of contractors. Some specialist contractors—such as Halliburton, Baker Hughes, Schlumberger or Saipem—are huge corporations in their own right, with multi-billion dollar annual turnovers. Others are more modest, locally grown enterprises. Contractors do everything from supplying, transporting and operating the drilling rigs, mixing chemical lubricants and sealants to pour down the holes, building pipelines and refineries (if Uganda ever gets round to that), insuring the operations against environmental and/or legal catastrophe . . . right down to laundering the oilmen’s clothes and making their lunches.
Chantal Sirisena and Allan Ssempebwa spent the month of August exploring this wider sector. Recently published, in our OIL PLAYERS|OIL INDUSTRY section, are their results: profiles of 23 oil industry contractors, great and small, headquartered in Milan, London, Houston, Cracow or Kampala, doing business in Uganda. Below, the authors summarise and reflect on their findings.
Last week Dr. Tom Okurut, Director of the National Environment Management Authority (NEMA), admitted in a public meeting that Uganda has failed to carry out a comprehensive environmental and social impact study in the Albertine Graben oil exploration and production area. Oil exploration activities are subject to Environmental Impact Assessments (EIAs) on a case by case basis—with each exploration well, for example, needing an EIA—but no one has yet joined up the dots. And, as Frederick Womakuyu reports below, environmental experts say Uganda’s EIA process is marred by delays, shortage of technical expertise, lack of follow up and the structural incentive for EIA consultants to please the developers who hire them. Read More
International groups and Ugandan civil society activists have expressed disappointment with a long awaited Natural Resources Committee report that was finally tabled in parliament last Thursday.
For the last seven months the committee has held extensive public and private consultations on two petroleum bills to regulate the development of Uganda’s oil industry. The draft bills, prepared by the Ministry of Energy and Mineral Development, were strongly criticised by civic groups for giving too much power to the Minister responsible for oil, with relatively little parliamentary oversight.
The committee’s report, a copy of which Oil in Uganda has seen, does not propose to trim the powers of the Minister, however. It recommends the introduction of several clauses to ensure the involvement of parliament and cabinet in decision making processes, but the minister still remains supreme. Read More
Visiting Ghana, a historic seed-bed of pan-Africanism, Oil in Uganda staff writer, Chris Musiime, found strong support for President Yoweri Museveni’s determination to establish a Ugandan oil refinery, in an effort to break the raw material export mould that has characterised—many would say, trapped—African economies since independence.
Some key figures in Ghana are urging Uganda to set up its own oil refinery, so as to reap maximum benefits from the country’s oil resources—even though Ghana’s own refinery experience has proved costly and contentious.
Hon. Kwabena Appiah-Pinkrah, the Member of Parliament from Akrofuomi in the gold-rich Ashanti Region, points out that for the entire Ugandan population to benefit, there must be value-addition to the crude oil from within Uganda. Read More
As Uganda’s parliament prepares to debate a long-awaited report on the Petroleum Bills, finally submitted by the Natural Resources Committee, a disgruntled member of that committee has secured permission to present his own, ‘minority report’ to the house.
Lubaga South MP, John Ken Lukyamuzi (CP), rose on a point of procedure after the Chairman of the Natural Resources Committee had introduced the committee’s views on the Petroleum (Exploration, Development and Production) Bill 2012, and requested the Speaker to allow him to table his own report.
Parliamentary rules provide for a committee member or members who disagree with the rest of the committee to table their own report, referred to as a Minority Report. Read More
Uganda has failed to carry out a comprehensive environmental and social impact study in the Albertine Graben oil exploration and production area, National Environment Management Authority (NEMA) Director, Dr. Tom Okurut, admitted during a September 6 meeting in Kampala.
“This study was supposed to be the first thing we did before any activities began. But we did not have the money to do it. Now that we have the money, we are doing it and it will be completed by December 2012,” Dr. Okurut told some 200 researchers, government staff and civil society representatives at a public meeting hosted by Nature Uganda at the Uganda Museum. Read More
“I sense this is the defining battle. Let those who are on the Lord’s side stand up and be counted,” wrote Uganda Revenue Authority Commissioner, Allen Kagina, in an email to senior colleagues, as behind-closed-doors arbitration proceedings opened in London last week to settle a dispute between the government of Uganda and Heritage Oil. Read More
In a fifth report from Ghana, Oil in Uganda staff writer, Chris Musiime, describes the country’s efforts to institutionalise transparency in the handling of revenues from oil and mining industries.
Mismanagement of revenues from the extraction of natural resources is widely cited as a major factor leading to the much-feared “resource curse”—the paradox that countries with an abundance of natural resources tend to have slower economic growth and, in many cases, more instability, than their less endowed counterparts.
To avoid this, Ghana joined the Extractive Industries Transparency Initiative (EITI) in 2003, as a way of tracking revenues from its minerals trade, eventually extending the practice to the oil and gas industry in 2010. Read More
Oil production worldwide has been synonymous with environmental damage, and Ghana is proving to be no exception. Oil in Uganda staff writer, Chris Musiime, reports from Takoradi, Ghana’s coastal ‘oil city,’ two hundred kilometres south west of Accra.
Oil production 60 kilometres offshore has created problems for the environment and the locals, according to Solomon Kusi Ampofo, the Program Officer in charge of the Extractives Industry at Friends of the Nation (FON), an environmental NGO based in Takoradi.
“Since the exploration and subsequent production of oil, nine whales have been washed ashore the coast in Jomoro and Ellembelle Districts,” he says. Read More
FORT PORTAL: Inside a colonial style bungalow, partitioned into several rooms, the largest space is devoted to rows of shelves containing books, magazines and leaflets on petroleum. The library, its staff say, receives about 20 visits a day from people seeking information on Uganda’s newly discovered oil to know what is happening in the oil sector and how to benefit.
This is the initiative of the Kabarole Research and Resource Centre (KRRC), based in Fort Portal, which has set out to sensitize the people in the Ruwenzori sub-region about Uganda’s newly discovered oil, so they will know how to benefit from the petro dollars while also holding their leaders accountable in use of public resources.
The centre serves the six districts of Kabarole, Kasese, Bundibugyo, Ntoroko, Kyenjojo, Kamwenge and Kyegegwa, which have a joint population of around 2.5 million people. Read More