I think its commendable for the Ugandan government to hold on to the licencing, but still a lot more is yet to be done, the whole of our present environmental and social law and institutional framework was formulated before we knew we would ever be among the 10 top petroleum producing countries in Africa. It therefore currently remains generic and does not address the specific issues and concerns associated with petroleum development in the, Albertine Rift, the most important conservation area on continental Africa albeit where 60% of the population still survives on less than USD$ 1 per day...

Robert Ddamulira, WWF Uganda. 

@Robert: Hearing your juxtaposition of a region's mineral wealth with the income of the community, the question I have to ask is whether you think it would be smart policy for the Government of Uganda to make special percentage-based transfers to the people in the Albertine Rift region.

 

See our discussion on Stephen Yeboah's post: http://bit.ly/iArCaM 

...the point being that this has become a contentious issue in Ghana and we are struggling to find the balance.

Considering that the Oil & Gas sector is emerging in Uganda at a time when the regulatory framework is weak and can not adquately address the requirements of the industry, it makes sense for a country to delay further licensing and commencement of the production phase, until a clear and effective framework is in place.

Having reviewed the proposed Petroleum (exploration, development, production & value addition) resource draft bill 2010, there are many risks and challenges (the linkages & opportunities notwithstanding) in the draft bill  that need to be addressed before it is enacted into law. The bill is:

• riddled with ambiguity and contradictions;
• It accords a single minister of petroleum excessive powers;
• negates the oversight functions of Parliament;
• undermines the functions of the public service in recruitment of commissioners;
• Is unclear on obligations, liabilities, penalities and the overall governance of the oil resource and revenues accruing thereof;
• the role of other government ministries, departments and agencies is also unclear

If passed in its current state, it will not help the country avoid the characteristic resource curse. It is, therfore, necessary that government stays the commencement of commercial production of oil & gas, until a clear and effective regulatory framework is in place. However, what we are seeing unfolding is the opposite with government attempting to commercially produce crude oil under the guise of "Extended Well Testing". This could spell doom for the country in terms of resource, revenue and environmental management.

Mr. Bazira:

The process of democratization is not pretty!

It is similar to preparing sussage; you would only want to see the finished product.

 

While you emphasize governement smoothens out the kinks in the bill ( and you know legislators are not usaully a hasty bunch) when will the investors in exploration,etc. begin to see return on their investments?

Ahmed

 

@Kobina: Thanks for your comment and question: I would go for "special percentage-based transfers to the people in the Albertine Rift region" but only as far it is equitably shared and seeks to lift the man in the bottom million to the middle thousands. This is cognizant of the fact that such a people are on the front-lines of the negative impacts associated with the industry and more so because they are still way below the living standards of the average Ugandan...

Dear Ahmed

I agree that democratisation is not a pretty thing. Often, it has cost people's blood. True that it is nice to see the finished product. The challenge is that if you are the cook, you may not avoid seeing the nasty process of preparing the sausage. We are part and parcel of the that generation that must prepare this sausage of democracy. The future generation will benefit by eating the finished product.

 

You allude to investors begining to earn a buck. It is in their interest to make money or good profit as quickly as possible. For the country, what is the rush to exploit? We could still wait a little longer to get things right, because the resource is not going anywhere and the investors can wait or go somewhere else to make a quick buck. They will comeback when we are ready. I know this raises concerns that:

• Investors have already invested money in the initial exploration process that needs to be recouped as quickly as possible to meet internal rate of return issues. These are issues that we can work with as we go along. You are aware that laws do not work retrogressively, so it is in the interest of the international companies to operate in an environment devoid of stringent regulations. The investors are not doing us a favour. It is not charity or goodwill and I do not think that they (investors) should be holding developing countries at a ransom for faster returns. Investors can afford to wait.
• The national economy needs the money, but we have existed for many years without incomes from these extractive sectors. As a country we can afford to wait a little longer to get things right.

@Henry: I'm interested in knowing what, in your view, is the threshold of regulations that must be in place before production begins. I ask because that standard will be different for different observers.

Mr. Bazira:

In academia, you're very right in all you said, especially when you wrote that.."we have existed for many years without incomes from these extractive sectors."

But how long can one sits on wealth without using it?

How about the other stakeholders-the local politicians anxious to make political capital of the resource once exploitation starts, or the external investors, etc.?

Are you a "buddy" of former strongman Sekou Toure of Guinea? He did what you just referred to when diamonds were discovered in parts of his country.

Anyhow, I will not hold the forum; let us continue this conversation next time I pass through Kampala. You'll pick the venue and I will pick up the tab for the cold beer to flush down the pounded matooke dipped in stewed freshly picked okra with slightly peppered fillayed tilapia.

 

Eng Ahmed Finoh

Dear Ahmed,

Point taken. You remind me of the adage "Mine Gold humanely, if possible, but in whatever case, mine it" Obviously, there will always be politicians wanting to make political capital in such investments and investor gleeing to make a quick buck. That is what we must manage.