Key figures in Uganda’s business elite have accused the national media of ignorance about the oil industry.
“We cannot afford to be addressed by ignorant writers. If you do not know anything about the oil sector, forgive Ugandans and just keep quiet,” Richard Kaijuka, Vice President of the Uganda Chamber of Mines and Petroleum, told a corporate gathering in Kampala last week. Read More
The oil industry in Uganda will be the most capital intensive that the country has ever seen. Many ordinary people believe that it may also result in mass job creation, alleviating unemployment and under-employment—said by some reports to run as high as 80 per cent among rural youth—that not only blights lives but could also foment social and political unrest.
But the reality is that the oil industry is notorious for consuming large sums of money in its operations, while employing relatively few people, most of whom have particular expertise. Worse still, manpower requirements in the industry decline with time, meaning that when facilities have been built and the oil is flowing regularly, semi-skilled jobs will all but disappear. Read More
Uganda should lose no time in signing up to the Extractive Industries Transparency Initiative (EITI), which requires companies and governments publicly to disclose oil and mining payments and revenues, former UK Secretary of State for International Development, Clare Short, told a group of journalists and civil society organisation leaders in Kampala yesterday.
“Nothing is stopping Uganda from acting now,” said Ms. Short, who has served as Chair of EITI’s Board of Directors since 2011. “You could start tomorrow. It’s always good to start before oil starts flowing, because then you’ve got transparency from the start.” Read More
The withdrawal of Dominion Uganda Ltd from exploration around Lake Edward—an area which, according to independent petroleum geologists, may hold between 90 million and 1.1 billion barrels of oil—leaves a plethora of unanswered questions swirling around an industry that, in Uganda, remains no more transparent than a dollop of waxy crude.
Why did Dominion pull out? What happened to a ‘Letter of Intent’ its parent company, UK-based Ophir Energy, signed in March 2012 with Canadian wildcatter, Octant Energy Corp., giving Octant an 80 percent share in, and operatorship of, Exploration Area 4B? Did the government of Uganda approve these deals? And where does this leave the mysterious Alpha Oil—a Ugandan owned company that, in one of the sector’s best kept secrets, for many years held a 5 percent stake in Exploration Area 4B? Read More
As midwestern Uganda gears up for oil production that will entail billions of dollars in investments, a range of central government officials interviewed by Oil in Uganda admit that there is no overall development plan for the region, and no mechanism for coordinating the efforts of different departments. Read More
The Chairman of Tullow Oil’s Ugandan subsidiary has expressed disappointment at the slow progress towards oil production since the 2006 discoveries in the Albertine Graben.
“In Ghana, it took them two years to commence production of their oil after it had been discovered. Kenya, after discovering oil this year, has asked Tullow [Kenya] to deliver the oil as fast as it was done in Ghana. But in Uganda, we are still negotiating confidentiality issues, stabilisation clauses, etc,” said Elly Karuhanga. Read More
by Taimour Lay
When you stand on the island of Rukwanzi at the heart of Lake Albert, your first thought, echoing perhaps the casual rhetoric of the region’s oil men, is that you are at the edge of a new frontier.
But for its communities the lake is a centre, a point of connection and integration, the great body of water into which the White Nile flows, part of the vast rift valley that draws Africa’s citizens into mutual dependency. What happens here matters to half a dozen neighbouring countries. But the lines being drawn now, as neat and straight as the borders on colonial maps, mark not sovereign territory, but exploration blocks for oil and gas companies. Read More
The Minister for Information in the Bunyoro-Kitara Kingdom has urged government to give special consideration to people in the oil producing areas as compensation for losses they may incur once oil production begins.
“Our people are going to face the effects of environmental degradation, social and political problems. They deserve additional benefits over and above other Ugandans,” said Moses Kirungi. “How can you hunt an animal on my land, slaughter it and take away all the meat without leaving some of the kill for the owner?” Read More
The government of Rwanda is negotiating an oil Production Sharing Agreement with a small Canadian company, Vanoil Energy, according to Dr. Michael Biryabarema, Director General for Mines and Geology in the Ministry of Natural Resources, speaking to The New Times newspaper.
Vanoil has been surveying the Lake Kivu Graben since 2007, following oil discoveries in Uganda’s geologically related Albertine Graben. The company is now analysing the results of 2D seismic data gathered during short-term Technical Evaluation Agreements with Rwanda.
Dr. Biryaberema says the government has now sent Vanoil a draft Production Sharing Agreement for review. It is expected to award the company exclusive exploration rights over a 1,631 square kilometre area for a period of five years. Read More
The view held by some Ugandans that oil companies are on a spending spree because they stand to legally recover their expenses when they eventually commence oil production is misled, says Eoin Mekie, the General Manager of Tullow Oil in Uganda.
While speaking to members of civil society at a meeting jointly hosted by Tullow, TOTAL and CNOOC, Mr. Mekie said that whereas the public believes that there is no incentive for the oil companies to be cost effective, it is in fact in the best interests of the oil companies to keep exploration costs low. Read More