Source: Elias Biryabarema, http://www.monitor.co.ug

Uganda could reap $5billion annually from oil exploration


For a nation as depressingly poor as Uganda,

this should pass for extraordinary tidings: the country will rake in an estimated $5 billion annually

from her petroleum exports once pumping crude starts

in the Southwestern region, according to projections by Tullow Oil.

That income forecast, Tullow's Uganda Country Manager,

Mr Brian Glover told Rotarians in Kampala on Friday, is based on an assumption of

a daily crude output of about 200,000 barrels per day. 

Mr Glover cast this windfall as nothing less than miraculous for Uganda whose current

overall export earnings stand at a tiny $2 billion,

hardly able to generate enough revenue to cover basic state expenses on critical sectors

like education and health. "Right now tourism is the single biggest foreign exchange earner,

bringing in about $500 million and oil is going to (could)  bring in ten times that," Mr Glover said.

Although hydrocarbon deposits in the Albertine Graben were first detected in 1938 by Shell,

the presence of commercial petroleum reserves were discovered in the area in February 2006

by Tullow Oil at Waraga-I well. Since then several more exploratory and appraisal wells have been drilled

by Tullow and Heritage Oil Corp, and Uganda now has a confirmed production capacity of

about 40,000 barrels oil per day.

While the $5 billion annual bounty may sound enormous and potentially life-changing,

the story of this windfall and its impact on Uganda pretty much appears set to instead morph into

the story of lottery winner, complete with the consequent ecstasy,

the spending binge and crass brokenness that follows.
Spooked by the possibility of this latter scenario, Mr Glover said that he had in fact accepted to come

to Uganda to prevent the kind of fate that befell Nigeria (where he was)

and its oil: the country exports about 2.5 million barrels per day and has earned

hundreds of billions of dollars in oil revenues over the decades but it is also home

to some of the worst forms of poverty and social-economic unrests on earth.

"I spent three years in Nigeria and what I saw there I would never want it to happen to Uganda,"

said Mr Glover. 

Strangely though while Nigeria has long been cast as the quintessential postcard of

oil corruption in Africa,

Uganda has already turned to it for counsel on how best to extract and manage the resource.

On a visit to that country in November this year, President Yoweri Museveni who traveled

with a huge delegation of businesspeople was quoted as saying after talks with

the Nigerian leader, Mr Umaru Yar'Adua, "I would want Nigeria to impact its expertise in the field of oil exploration

to us so that our people can have the technical know-how rather than relying on people from outside the continent."

Mr Glover said once Uganda's petroleum extraction machinery starts to roll in earnest and at

full scale, the industry will be employing about 10,000 people.

Tullow Uganda chairman, Mr Elly Karuhanga said the government of Uganda in concert with

Tullow Oil and Heritage are working to establish a petroleum institute in Uganda,

expected to expand specialised expertise in the different fields of the

oil industry: exploration, contracting, production, marketing, revenue management and suchlike.

Proceeds from oil are ideally expected to be ploughed into

critical development sectors like education, health and infrastructure.

Source: Elias Biryabarema, http://www.monitor.co.ug

Jean-Louis Kayitenkore
Procurement Consultant
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Home: (250) 55104140
P.O. Box 3867
Kigali - RWANDA
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