Though considered a blessing, it can also be turned into a curse, what is it? Oil extraction in Uganda which for the past decades have not been exploited. Currently, the government of Uganda is on the verge of some big decisions for its economy, its environment and its people in general in relation to oil extraction that is to take place very soon.
The global witness shows that Uganda has got a better financial deal for the country’s oil though it has failed to put in place the crucial human and environmental rights. There are various serious concerns about the potential environmental and security consequences of allowing oil extraction to take place in the fragile areas and protected areas such as Murchison falls national park, Queen Elizabeth national park and the nearby areas.
Many companies have shown interest in bidding for Uganda’s oil blocks some of which will go ahead to sign deals worth billions of dollars to extract oil in highly sensitive areas which include national parks and alongside the Democratic Republic of Congo, as of 1St July, 19 companies had been registered by the government of Uganda.
For the purposes of being transparent, the government of Uganda has published the names of the companies and the map of new oil blocks and this action is believed to help the government in selecting the best companies to pattern with. More so, the contracts entered are like marriage sorts in that once entered, they can last for long taking even 30 years and more.
The government of Uganda has put licenses ant taxes to be paid by all companies interested in extracting it oil, as a matter of fact; most of the applicants are a mix of small and medium sized outfits and not the biggest oil companies. It is only the Tullow Company that has showed interest of all oil companies already operating in Uganda. Also, Low oil prices and lack of capital, coupled with difficulties that companies have experienced in Uganda over tax and production licences, appear to have deterred the oil majors from exploring fields in Uganda.
It is therefore anticipated that the informed selection of which companies to extract oil in Uganda will be difficult since new not well known companies are the ones that have shown much interest in extracting Uganda’s oil not the big already known ones.
Before the government decides on which company to bid with, it has put in consideration certain facts which include among others,
The history of the company, companies whose history in different operations oil extraction inclusive in other areas is a very important a factor for the government to consider, companies that have histories of bribery and un responsible activities such as not putting in mind the environment and the surrounding communities should not be allowed in the contracts, a victim here is the Oranto petroleum in Nigeria which has a history of practicing bribery in the year 2007 , such should not be allowed to bid.
The capability of companies interested in bidding is so much important, the government has to sure of company’s technical and financial capacities to extract oil. Companies which sign contracts with the intension of selling them out to other people and not extracting oil themselves should not be allowed to bid, such companies minimize the government’s profits from oil at the end of it all.
The strong record of the company in terms of environmental impact assessment, technical capacity and public reputations that minimize the risk of environmental and social harm should be highly considered. This will be aimed at protecting Uganda’s highly sensitive and bio-diverse Albertine Graben, where the majority of exploration is taking place, Oil extraction in these areas should be paramount.
Conclusively, the Government has so far acted transparently by publishing the list of interested companies which transparency should continue as the process goes on, the government should continue being open on how it short lists applicants and continue to publish contracts for people to know what is happening themselves, the chronicle corruption in other sectors of the country should not seep in to this , educated government technocrats should make complex decisions and be able to scrutinize them for profitable and peaceful oil extraction in Uganda.