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Essential Readings on Oil and Gas, Oil and Gas

Oil, Money, and Secrecy in East Africa


South Sudan journalists visit oil drilling siteOfficials in East Africa are gushing with anticipation over potential oil revenue: A new production agreement has been reached in South Sudan; fresh discoveries have been made and drilling deals signed in Kenya and Uganda. But if the potential for economic growth is great, so is the capacity for corruption and environmental degradation if journalists are not allowed to report on contract details and resource allocation. And each of the East African nations has notable blemishes on its press freedom record, including government-sponsored violence in Kenya and Uganda, and suppression of in-depth reporting in South Sudan.

Oil accounts for almost all of South Sudan’s government income, and although the country has wrangled with Sudan over who owns the oil and how much each side should pay to transport it, Africa’s newest country has a wealth of untapped reserves, the World Bank says. In Uganda, estimated reserves of 3.5 billion barrels have the potential to double the country’s economy, and in Kenya new reserves have been discovered in the northern county of Turkana and near the Ethiopian border.

Whether all this oil will benefit the average citizen depends largely on whether extraction deals are handled in an open, transparent manner. A comparison between Brazil and Nigeria is instructive. The South American country provides monthly updates on oil production on a state website. Brazil became the seventh-largest economy in the world with the help of oil output, with 2011 per capita income of $12,594, according to World Bank statistics. In Nigeria, five decades of oil output have been mired in secrecy and conflict. Although the country’s oil exports are comparable to those of Brazil, its per capita income is just $1,452.

So far, the authorities in Kenya, Uganda, and South Sudan have released occasional press releases and basic information on government websites about drilling locations and production expectations. But there are few specifics on how much private companies and governments are investing in the oil projects, how revenues will be shared, and what tax rates are applied. “Detailed information about contracts and compensation is not readily available to journalists. It takes a lot of effort to obtain such information,” said Ugandan journalist Joe Nam, who reports on oil drilling and contributes to the daily New Vision. “In most cases it is not available at all unless it is leaked by a source in confidence.”

Read the full story on the CPJ website

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