Energy Africa: Oil Exploration focused on the Lake Albert area

That Uganda has struck significant oil deposits may not be breaking news anymore but it no doubt remains the best piece of good news to come to Uganda's ears in millennia to date. The oil prospects have been evaluated and reevaluated with more good news trickling in time and again. This has engendered a state of euphoria among Uganda's business community and, of course, among the people living in the areas where the oil will be mined. The government has said that the real commercial petroleum production is scheduled to commence as early as 2009. Once production starts, the economic face of Hoima and the adjoining areas are anticipated to undergo sweeping transformation. Dr. Maggie Kigozi, the

Amid all the ecstasy about the oil industry, there are ways to examine the prospects thereof in order to understand what Uganda stands to gain. Two companies have began drilling at a potential ‘World Class Strike' site some 270km west of the capital Kampala in the Albertine Graben, the northernmost part of the western arm of the East African Rift Valley system along Lake Albert in north western Uganda. The companies include Heritage Oil and Gas Ltd and Hardman Resources and Energy Africa. The expected output from just one of the wells is estimated at 250 million barrels. The oil is expected to be exported to the emerging industrial giants of Asia especially India and China and Uganda expects to mint a cool USH. 3 billion per day!

However, economic analysts often assert that for a country to realize maximum benefits from petroleum production it helps much if that country's manufacturing sector is mature. That is because that economy would be able to internally support the numerous sub industries that inexorably thrive around the petroleum exploration. One such industry is the manufacturing of petrochemical products such as cosmetics, pharmaceuticals, plastics and others. Around the world this is the most lucrative businesses but also require absolute advanced technological capacity, which Uganda sadly lacks.

The cynics have an even more questioning perspective of the potential outcomes of Uganda's oil prospects. Citing examples from other oil producing African countries, these skeptics have predicted doom once oil starts flowing into the economic machinery. For instance, most of these countries enjoyed relative peace until oil drilling began. 90% of Nigeria's economic wealth is in the hands of 10% of the population (Nigeria is Africa's largest oil producer and sixth largest in the world). Misappropriation of oil revenue by politicians has reached endemic proportions - making Nigeria the most corrupt country on earth. Civil strife has typified most of these countries with many groups striving to have a piece of the oil pie. Some government critics and/or opposition politicians posit that putting oil money in the hands of the movement government of Uganda is a recipe for disaster given the widespread corruption that has become a raw cancer in Uganda. Whatever the concerns, Ugandans eagerly await the outcomes of the promise of heaven on earth.

By Nathan Kiwere