Uganda’s oil and economic transformation

Uganda stands at the cusp of a transformative era, with prospects of economic prosperity. Earlier this week, President Museveni reiterated Uganda’s position and plans for its oil projects. He said, “Our first oil will start flowing in 2025. That will be an additional source of State revenues and financial flows into the economy.”

The President’s affirmation of Uganda’s oil projects underscores the significance of this sector, highlighting its potential to drive State revenues, financial inflows, and overall economic growth.

It is well established that Uganda is on the verge of a high value oil and gas project for the first time in history. This project represents a small portion of the possibility of Uganda’s oil and gas.

At the heart of our oil revolution lies the Albertine Graben, a geological marvel that has only seen a fraction of its potential explored. Currently, the area explored represents less than 40 percent of the total area with the potential for petroleum production and only 12 percent is licensed.

In the explored area, out of every 10 oil wells explored, nine encountered hydrocarbons. This reveals an approximately 90 percent success rate against the global average of 25 percent.

This prospectively underscores the untapped potential that remains within the Graben, emphasising the need for continued exploration and development. As far as hydrocarbon potential is concerned, Uganda has truly been blessed by nature. This under-explored Graben still has a lot to give.

As a result, from the exploration activity that has already been undertaken, Uganda has established 6.5 billion barrels of stock tank oil initially in place (STOIP) of which 1.5 billion barrels are recoverable. The commercialisation plan for this oil involves two major initiatives: the construction of the East African Crude Oil Pipeline (Eacop) and Uganda’s refinery project.

Eacop is set to redefine energy transportation in the region, spanning an impressive 1,443km from Uganda’s oil-rich Hoima to the Indian Ocean port of Tanga in Tanzania. More than a mere conduit for oil, Eacop represents a smart and intelligent pipeline system, showcasing cutting-edge technology and design.

This infrastructure marvel is not only a testament to Uganda’s commitment to sustainable energy practices but also a catalyst for regional cooperation and economic growth. By facilitating the efficient transport of oil to foreign markets, Eacop promises to unlock new avenues of revenue and strategic partnerships.

Similarly, Uganda’s refinery project stands as a beacon of innovation, poised to revolutionise the East African region’s industrial landscape. Beyond processing crude oil, the refinery embodies a comprehensive vision of growth and development. This visionary endeavour will not only boost domestic value addition but also establish Uganda as a hub for refined products, creating a ripple effect across sectors such as manufacturing, transportation, and commerce. After all, crude oil can be the feedstock for almost 100 products, including but not limited to plastics, pharmaceuticals, tar and textiles. In light of the above, President Museveni makes a significant point in pointing out the value of this project, to the Treasury, industry, the travelling public and most importantly, to the economy of the future.

Right now, we are at a pivotal moment in history where, to paraphrase a great mind, the tide of history meets the current of hope. We are living at a time where Uganda has never had a more educated, exposed and ambitious population. The responsibility to harness the potential of the oil and gas sector rests on the shoulders of our generation. It is the historic duty of this generation of Ugandans to bring to fruition this and other life changing projects for the generations of Ugandans to come.

Future generations deserve to find that their ancestors refined oil, improved mobility, improved access to energy and protected the environment all at the same time. By embracing this historic duty, we can set the stage for unprecedented progress, ensuring that our descendants inherit a legacy characterised by refined oil, enhanced mobility, sustainable energy access, and environmental preservation.

We must chart a course toward a future defined by the sustainable transformation of our economy and the enrichment of future generations. Everything else, from Breton Woods or other poverty conservationists, is just noise. And you can take that to the bank.

The writer is an advocate and partner at Kampala Associated Advocates

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