Oil scramble shouldn’t turn Uganda into global septic tank

By Samuel Olara

Uganda is in the midst of an ‘oil boom’ and continues to attract serious attention from the world’s major oil players. The ‘oil boom’ has predictably resulted in what appears to be “the global scramble for Uganda’s “crude gold filed”.Several international oil giants such as the Italian Eni and the Chinese state-owned CNOOC want to partner with Heritage Oil and Tullow Oil whose exploration has hit oil in the Lake Albert region and in Amuru Northern Uganda.

Heritage Oil has entered an understanding with Italy’s Eni International, to purchase its stake in Uganda’s Block 1 and Block 3A, a deal that culminated in Italy’s Foreign Affairs minister visiting Uganda in early January 2010, partly on a mission to shore up the company’s credentials.

Tullow Oil on the other hand says that it wants to partner with the Chinese firm, CNOOC, in developing Uganda’s oil industry. American Exxon Mobil have also been said to have shown an interest in Uganda’s oil.

Conservative estimates are that sub-Saharan Africa alone will receive more than US$250 billion in oil revenues in the next decade, the largest and most concentrated influx of revenue in the continent’s history.

It remains doubtful that the oil revenues will benefit sub-Saharan Africa’s economies; rather if we are learn from the experiences of countries like Nigeria, Angola, Sudan, DRC, Kenya, Egypt, Corte d’Ivore, and many more; they always have a way of generating mass human suffering, massive corruption, political instability, wars and enormous environmental damage.

This day the catch phrase is the globalisation of the global village, here in Africa, we are under the impression of being that village’s septic tank.

With Uganda therefore joining the big boys in oil exploration, it is only a natural human instinct that we wonder about the future. Many commentators have already speculated about the benefit to the economy and GDP, while others have pointed to the ‘curse’ that always seems to come with oil exploration.

So can Ugandans be proud of this overwhelming interest from the world’s oil giants? It remains to be seen, but one thing is obvious; the interest of Ugandans has been overridden right from the word go.Our dear visioned leader, President Yoweri Museveni and his Cabinet could not resist the temptation of nodding to deals that only benefits a handful, at the expense of the country. It is a deal between the oil companies and state house, Parliament as usual has been overridden “ it has not been allowed to scrutinise the deal let alone see it.

Even the Norwegian experts advising state house have expressed serious reservations: a review of Uganda’s contracts commissioned by the Norwegian Agency for International Corporation (NORAD) in 2008 concluded that the profit-share model adopted ‘cannot be regarded as being in accordance with the interests of the host country’.

According to impeccable sources, the oil contracts are structured so that price risk lies primarily with the state, while the private companies are virtually guaranteed a healthy return even if the market slumps. As the oil price rises, investors will make a higher and unlimited profit, taking close to one quarter of oil revenues, whether each barrel is fetching $100 or $200.

The 20-year contracts, consistently weak or completely silent on human rights protection, also include a sweeping ‘stabilisation clause’ requiring the Ugandan government to compensate the companies for any future change in the law that affects their profits – designed to militate against improvements in environmental standards.

Where it escalates into a Legal dispute between the two sides, it will not be resolved in Uganda, but in London: at the Energy Institute.

Tullow Oil insists that “its contracts with Kampala were the best deals in the world for the government.”

Then there is the illegal disposal of toxic residue. All types of industries; whether big or small generate hazardous wastes. Oil companies are no exception, some will try to get rid of their dangerous waste by simply dumping it illegally. All for saving money at the cost of human beings and the environment. It’s a threat to our rivers, lakes, air, land, oceans and ultimately to our health, environment and our future.

Recent soil tests by the Uganda Wildlife Authority (UWA) in Purongo, Amuru district have shown unacceptable levels of heavy metals in the waste water and mud cuttings dumped by the oil companies in the process of their exploration activities. The cuttings are pieces of rock that come out of the Earth’s crust during drilling.

They contain a mixture of chemicals that are used to cool the temperature of the drilling head. The heavy metals found during the soil tests were lead, zinc, chromium, cadmium, manganese, cooper, nickel, iron, manganese, phosphates, nitrogen, chloride and sulphates.

In Murchison Falls National Park for example, waste was removed by Heritage Oil and deposited in the land of a peasant in Purongo. The peasant was paid Shs 300,000 to put the drill mud on his land. A pit was dug and the waste was dumped there.

Exposure to these chemicals can damage the brain, cause cancer and tumor, kidney failure and ultimately cause death. In pregnant women, high levels of exposure may cause miscarriage, while in men it can damage the organs responsible for sperm production.

The day will come when Ugandans will realize that they are being made into helpless pawns in a monstrously vicious game of masters and slaves.

Olara is a human rights advocate

olarasamuel@hotmail.com