The politics of oil in Uganda

Major oil discoveries in the Lake Albert region of western Uganda suggest that total reserves in the area may be as high as 2.5 billion barrels. If correct, this would make the Albertine Graben – the geological formation in which the oil sits – one of the largest onshore oil fields in sub-Saharan Africa. As such, the finds have the potential to transform Uganda's agriculture-based economy. Once oil production reaches full capacity, the new field could yield anywhere from 200,000 to 350,000 barrels per day (b/d), which even at the low end would make Uganda the fifth largest oil producer in sub-Saharan Africa, and place it among the fifty largest producers in the world.1 At current prices, revenues are likely to be in the order of US$2 billion per year (around 12 percent of GDP), whilst investment in oil-related infrastructure may eventually exceed US$10 billion, and would presumably generate thousands of local jobs. Debate rages over what effect the new oil economy will have on Uganda's wider economic, social, and political development: can the new petrodollars be harnessed for the greater good, and thus generate a genuine, broad-based ‘resource boom’, or will such factors as corruption, nepotism, and a general lack of transparency inevitably result in Uganda providing yet another example of the ‘resource curse’? On the one hand there are those, led by President Yoweri Museveni, who have presented an almost utopian vision of the wider advantages that will follow. On the other, there are a growing number of political and civil society voices expressing concerns over the individuals and institutions who will oversee oil production, and the regulatory framework within which they will operate. These concerns have become more tangible in recent months, following a series of bribery scandals involving a number of senior government officials; heated debate over new oil legislation; and the onset of a major legal wrangle involving the Government of Uganda and the two main companies involved in the recent finds: Ireland's Tullow Oil and Canada's Heritage Oil.