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Oil and Gas

Uganda’s Oil: Boom or Bust?

Uganda’s economic prospects are changing because of an area of the Western Rift Valley, along the Nile River. That’s where you’ll find Lake Albert and Murchison Falls, along with national parks teeming with wildlife. But this area will change Uganda’s future because of what’s under the ground.

Murchison Falls, downscaled version of File:Mu...

Murchison Falls, downscaled version of File:Murchison Falls – by Boschlech.jpg (Photo credit: Wikipedia)

“It is there that God put oil,” says local businessman Elly Karuhanga.

Tests indicate that there is a lot of oil, adds Karuhanga, who heads up the Uganda branch of the British-based oil company, Tullow.

During exploration, test drills typically strike oil maybe a quarter of the time. Karuhanga says in Uganda, it has happened nine out of every ten times.

“Wherever you sink you find oil,” he says with a laugh. “There is oil everywhere.”

Experts believe there could be enough oil in Uganda to make the country one of Africa’s biggest producers — enough oil to help pay for a lot of needed infrastructure.

The discovery has stoked a kind of oil fever, according to Peter Mwesige, Executive Director of the African Center for Media Excellence in the capital, Kampala.

“In some ways you could call it real madness,” he says. “There is a lot of excitement and drama around oil. People think the government is going to become a middle income country in just two or three years.”

Three companies have contracts to extract the oil. Tullow, the Chinese National Offshore Oil Company, and France’s Total. But the deals have been kept under wraps.

The government’s secrecy has bred skepticism. Mwesige says that’s why his group is training journalists to cover the nascent oil industry.

“Very few people know what is really going on in oil,” says Mwesige. “There is an information gap that has led to all sorts of accusations and allegations of corruption and bribery being thrown around — some true, some quite ridiculous.”

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