Uganda: Locals deserve best deal out of oil (editorial)

February 2nd, 2010

 

 

Kampala (Uganda) - Oil-rich Uganda is now like a new girl on the block, being eyed and sought after by all kinds of suitors.

News that several international oil giants such as the Italian Eni and the Chinese state-owned CNOOC want to partner with others already here to invest in Uganda's nascent oil industry shows just how much our country's fortunes have changed since oil was discovered in Western Uganda.

The oil boom has inevitably resulted in what appears like a global scramble for Uganda's 'black gold'.
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Apparently Heritage Oil has entered an understanding with Italy's Eni International, to purchase its stake in Uganda's Block 1 and Block 3A. Italy's Foreign Affairs minister was in Uganda early this month, partly on a mission to shore up the company's credentials.

However, Tullow Oil, Heritage's partner here, has invoked a pre-emptive clause that gives it first priority to buy the stake. Tullow Oil says it wants to partner with the Chinese firm, CNOOC, to take up Heritage's stake and help develop Uganda's oil industry. Even global players as big as American Exxon Mobil have been said to have an interest in Uganda's oil.

While Uganda can be proud of this overwhelming interest, utmost care must be taken to ensure that the Ugandan people's interest overrides every other interest in the dealing process. Our leaders must resist the temptation of nodding to deals that benefit them as individuals, at the expense of their country.

The government, as custodian of these oil resources, has a duty to ensure that they are harnessed and developed for the benefit of its people. A good step in this direction is to honestly and transparently evaluate the pros and cons of both Eni and Tullow, or any other player that might emerge in future, and pick the best possible deal.

A mistake at this stage might haunt the industry that holds a lot of promise for Uganda's present and future. Once again, let Uganda's interest supercede every other interest. The ball is in the government's court.

 

 

source.The Observer (Uganda) - January 28, 2010.