Procrastination is the Thief of Time, Not Oil

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Uganda is a landlocked country located in East Africa. But that’s no news and so is the exploration in the East Africa Rift System. Oil seeps have been known for at least 100 years around Lake Albert and Lake Tanganyika and sampled by early field geologists mapping the African continent. So the story goes, as we shall see in the various versions (two actually).

Ministry of Energy and Mineral Development, Uganda

During the colonial days, oil seeps were mapped and documented in Uganda and thereafter, wildcat shallow wells were drilled in Kibiro (Hoima), Butiaba (Buliisa) and Semliki valley based on the research. But these efforts were hampered by WW2 and later by colonial policy which zoned the East African region for agriculture. Adding to all this, the political turmoil in Uganda during the 1970s did not make it an attractive destination for petroleum exploration.

In the mid-1980s, with Uganda resuming its status of stability, more consistent efforts were undertaken including data acquisition by government geoscientists, packaging the data for promotion, capacity building and institutional development. The attraction of international oil companies in the late 1990s proved the success of these efforts.

Tanzania Petroleum

The Tertiary rifts were tested by shallow wells in the 1930s (Waki-1; Lake Albert) and 1940s but interest then waned until the 1980s and ’90s when these areas were re-licensed following Chevron’s success in the Cretaceous rift basins of Sudan. Amoco was an early pioneer and jointly with Shell drilled a number of wildcats, though with little success. These included Loperot-1 and Eliye Springs-1 in Lake Turkana, Ruzizi-1 and Buringa-1 in Lake Tanganyika and Galula-1 and Ivuna-1 in the Rukwa rift. It was only in the early 21st century that interest returned to the rifts, with Lake Albert in particular being a focus for Tullow Oil, as well as Heritage Oil, Energy Africa and Hardman, subsequently all acquired by Tullow Oil and then sold on partially to Total and CNOOC.

Anyway…

Come 2006, a major milestone was achieved when the Mputa-1 well struck oil and was declared the first commercial discovery. Following this, tremendous success has been recorded in the country’s emerging oil and gas sector and various achievements made in the sector’s development. Uganda’s petroleum resources have grown from 300 million barrels in 2006 to 6.5 billion barrels in 2014. The legal policy and institutional framework for the sector has evolved. Best practice technology is being utilized in the country. And most importantly, frameworks to ensure stakeholder engagement, participation of Ugandans in the sector, environmental protection and robust revenue management are in place.

The country has now progressed from the exploration and appraisal to the development and production phases of the petroleum value chain. Plans to put in place infrastructure such as processing facilities, pipelines and a refinery to support production are in advanced stages. It’s expected that by 2021, Uganda will have joined the ranks of oil producing countries. For the East African region, this success de-risks the entire rift system for petroleum exploration and development.

But…

“It’s the unknown that draws people,” said Bucchianeri, and maybe this whole story starts because of a simple question. What should Uganda look out for?

Uganda should be ware of the curse that lies in the black gold they just discovered. The unfortunate turn of events where foreign companies take near full ownership of a resource that is rightfully the Ugandans’. An environment destroyed in the quest to gain more revenues through oil discovery, only to have to spend millions (maybe billions) trying to fix it. Are people still having to pretty much survive because all the jobs that the oil industry was projected to create are now in lands beyond?. Sectors abandoned following a focus of all energies on one sector, forgetting the grave fault that is to puts all one’s eggs in a single basket. The basket might fall. The basket will fall because all things eventually come to an end, even the good ones.

Indeed, we cannot in a single sitting be able to point out all the potholes that Uganda should check for on this road to building an oil and gas industry. It has been argued (Ellen R. Wald, 2020) that the oil and gas are still in the ground, whether companies extract it tomorrow, next month or next year, the low oil demand caused by the coronavirus pandemic cannot kill the industry, it can only delay it. So let’s delay to strategize. Oil’s really not about to get some running shoes any time soon.