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From: Ssemakula <[email protected]>
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Sent: Friday, October 28, 2011 9:58 AM
Subject: Museveni Not the One Who Discovered Oil
Uganda: Museveni Not the One Who Discovered Oil
Fred Guweddeko
23 October 2011
________________________________
opinion
The Uganda parliament special session on the secret oil agreements assumes that
the reserves are lucrative and will certainly generate billions of dollars.
However, the official Energy Ministry position is that the feasibility report;
implying production, economic and commercial practicability, is expected in
July 2012. Until this report is positive, Uganda may have oil but it maybe
unviable.
This crisis of what, how much, when and to who the oil revenue will flow was
caused by President Museveni revelation of high quality, easily exploitable
oil, and a mini-refinery by 2009. On the contrary, Uganda has low quality wax
and sulfur laden heavy oil; very difficult to extract, transport and refine,
and thus only viable with complex technology, high energy supply and under very
high world prices.
In August 2000, Monitor newspaper commissioned me to investigate the then
highly secretive but supposedly prospective Uganda oil exploration. My findings
were contrary to President Museveni later [8/10/2006] lucrative oil discovery
claims. I noted that the oil seeps were known before colonial rule, Uganda
coloniser Sir Portal visited the seeps in November 1893 and an oil exploration
license was issued by the Uganda colonial leader, Col. Sadler on January 7,
1902.
My report detailed that past regimes failed in 1912-3, 1927-9, 1936-8, 1950-2,
1963, 1968-9 and 1971-2 to exploit this oil because of its poor quality.
Ugandans like Mr Wanume Kibeedi can testify that Amin found the oil unviable.
The then Monitor editors challenged me to further investigate the interest of
foreign companies in unviable oil reserves. I established that these companies
were pursuing profiteering and not oil production.
I explained that the scheme was for the exploration companies to claim very
profitable oil reserves, sign lucrative ownership contracts, increase their
company value and stock exchange ratings, sell shares, earn profits and march
on. Uganda would lose ownership of the reserves; get no oil and no revenue. The
same case with the current Cobalt at Kasese.
I indicated that the oil reserves final owners would be companies controlling
the oil products import into Uganda, and thus with long-term interest in this
Albertine region low grade heavy oil. That since these companies would be using
the Kenya-Uganda oil pipeline [then approaching Eldoret], the Uganda oil
reserves prospects were to be subject to the cost benefit of refining the
costly heavy oil or importing cheap light oil.
Finally, only a highly edited historical part one of my report appeared in the
Monitor of November 1, 2000. Part two indicating the un-prospectiveness of
Uganda oil promise was not published. Thus unchallenged, President Museveni
announced on October 8, 2006 that he had discovered oil where colonialists
failed and would not relinquish power to people like Kizza Besigye, but stay on
and use his oil to transform Uganda.
http://www.monitor.co.ug
Ugandan Prime Minister Amama Mbabazi, Sam Kuteesa, the minister for foreign
affairs, and Minister for Internal Affairs Hillary Onek allegedly benefited
from billions in bribes from oil company, Tullow Oil Plc.
Initially President Museveni mentioned oil earnings will flow in 2009 while
overlooking the poor quality problem. Museveni has since traversed all oil
generating countries on the globe with no solution. Timelines have shifted four
times. The latest is a new feasibility in July 2012, implying that production
and revenue flows are unknown. The secret of Uganda oil is thus feasibility not
revenue sharing.
MPs should study the challenges of heavy oil production especially the massive
electricity needs given the appalling NRM electricity generation capacity.
Those pursuing revenue sharing agreements should be cautious about raising
expectations, like Museveni did, over something whose feasibility is not
established.
Mr Guweddeko Researcher Fellow, MISR; Makerere University
James Ssemakula
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