Oil delay: Who wins, loses?

Harsh reality. Oil exploration is teetering with unforeseen impacts and costs, which have only highlighted how far away Ugandans are from seeing any oil benefits at all. Saturday Monitor’s Isaac Imaka & Philippa Croome review last year’s oil tumult and its impact on the sector.

Mr Mekie says Tullow is taking all of the risk, with government offering no guarantees. Big oil has failed before, and Tullow says it has already sank millions into a project that is still at least five years away from producing substantial amounts of oil, and that only then will they recoup those expenses.

“When we come to talk about production sharing agreements we need some sort of assurance on stability,” says Mr Mekie. “The economics of this investment is premised around a certain set of assumptions – around fiscal stability, government stability, legislation, et cetera.”

Tullow says they are in it for the long haul. Oil production will surpass presidents and MPs, and even legislation. At the end of the day, it will be the average Ugandan who will be living in a post-oil economy – but what that economy will look like, remains to be seen.

The efforts
Currently, Uganda boasts of an estimated 2.5 billion barrels, or 397.5 billion litres of crude oil and 7 billion standard cubic feet of gas. This is just from 40 per cent of the prospected Albertine Valley.
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