By Dorothy Nakaweesi
March 30, 2004 -Monitor
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KAMPALA - The search for commercial quantities of petroleum in Uganda is yielding positive results but more tests are to be done mid next month.
"This is an exciting but equally anxious time in the search for oil in Uganda, with reports that drilling is showing very positive results," Bbumba said. She said Uganda should invest the oil revenues in programmes like Modernisation of Agriculture, Universal Primary Education, Poverty Eradication Action Plan, HIV/Aids treatment and prevention, rural water and sanitation, primary health care, roads, promotion of private investment and rural electrification to improve the living conditions of ordinary citizens. Bbumba was speaking at a meeting on the development of oil and gas industry in Uganda at the Speke Resort Munyonyo on March 25. She also said that a trust fund should be created to ensure that the proceeds are invested in sustainable socio-economic development to cater for the future. "Trust funds may be created in order to save something for the future generations," said Bbumba. Currently, Uganda imports petroleum products worth $165million per annum with the consumption rate estimated to increase at the rate of 5 percent per annum. Bbumba said a proper management of the oil revenues could offset this import bill, which consumes an unsustainable 40 percent of the country's export earnings. At the same meeting however, Bank of Uganda governor, Mr Emmanuel Mutebile, warned that oil production in Uganda could cause more problems than anticipated. "Knowing Uganda, we don't have the discipline [and] history teaches us that the discovery of oil has often turned out to be a curse than a blessing for developing countries," he said. The litany of problems associated with oil discoveries includes corruption, inflation, environmental destruction, the so called 'Dutch disease' which renders traded goods industries uncompetitive and destroys jobs, unsustainable debt, widening inequality of wealth and incomes, huge public sector construction projects that turn out to be 'white elephants' and in some cases civil wars such as in Nigeria. Last year, Heritage Oil, a Canadian oil exploration firm, announced that it had found oil deposits in the Lake Albert region. The firm is currently doing tests to determine the oil horizons and quantities available. After 18 months a seismic survey test will be done to establish the drilling target and for how long the oil can last. Oil exploration in Uganda started in 1986 around Lake Albert in Western Uganda and Karamoja in North-eastern Uganda. The government has so far invested in more than five million dollars in the field surveys. The venture has been in conjunction with the Norwegian government through the Norwegian International Programme for Petroleum Management and Administration (PETRAD). "We have been involved in the development of Petroleum development in Uganda since 1993 in the field of training and giving technical advise," said Ms Ellinor Melbye, PETRAD project manager. Norway produces three million barrels of oil per day, which contributes 23 percent to its GDP.
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© 2004 The Monitor Publications
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