The politics of the oil refinery and the
disgruntled north
GULU/KAMPALA:The
people in the north are, after passing through over two decades of a piteous
life, dissatisfied with the oil and gas status quo in the region and are
questioning whether or not it is worthwhile to keep faith and hope alive. ut
why is oil stirring doubts in the north?
Touchy
issues range from choice of the refinery site, reference to oil as a resource
in the west, lack of transparency and limited community involvement. “The
people in the north feel sidelined and keep calling us complaining why the
government keeps referring to “oil in the west” yet the north has the biggest
reserves,” Gulu Anglican Bishop (rtd) Macleod Baker Ochora says. “I think there
is a conspiracy to divert the attention of the people.”
Doubtless,
oil has been a source of trouble, including ethnic conflicts and secessions in
countries where oil kleptocracy, by a section of rent seeking individuals in
government, is sustained in disregard of the economic development of the common
man.
While
the politics of where the oil is located may be looked at as trivial, its
benefits to the “oil region” is invaluable; from increased economic activity
to, in some instances, getting a privileged loyalty for being host communities.
Former
Agago County MP and former Leader of Opposition in Parliament Morris Ogenga
Latigo also expressed reservations on the north not being flagged as an oil
region.
“That
alone,” he says, “tells you a lot about this country, but for the good of us as
a country, it is something we should bypass.”
“Gov’t
is lucky that Acholi has been through a lot, but the current side-lining would
have sparked off an uproar if it were for other regions,” Mr Latigo says,
adding that regardless of this disenfranchisement, “our focus as people of the
north is on how revenue will be split.”
The Petroleum
Exploration and Production Department (PEPD) has consistently been publishing
and announcing areas where oil has been struck and which companies were
licensed in which area. The department has also been engaging journalists as
well as political and traditional leaders from, especially the oil regions, by
keeping them abreast of the development so far made in the sector.
Mr Owor
Lino Ogora, a resident in the north, says information has not been trickling
down and most of the people in the north do not have the information. This, he
says, has kept the people out of the loop and thus they cannot plan what and
how to invest, or position themselves in order to tap into the sector. “The oil
and gas question is tricky. The manner in which it is being handled by the
government is cautious and lacks transparency,” he says. “Government should
come out and be transparent on issues of revenue and royalties to the people of
north.
Gulu
District Chairperson and head of the Acholi Local Government leaders, Ojara
Mapenduzi, says his leadership has never understood why the government has
persistently refereed to oil deposits in Nwoya District as Pakwach Basin oil.
“Pakwach is on the other side across the Nile,” he says. “They should at least
call it Murchison oil if they don’t want to say it is from Nwoya or northern
Uganda.”
However,
he says the people from the north may have themselves, or their leaders to
blame for especially the lack of pro-activeness. At the end of the day, leaders
from the north have to be at the forefront because it is about how much
pressure you put on the government.
While
the Bunyoro leadership has come out unequivocally to demand for a fair share of
the resource, the political leadership in northern Ugandan have sat back and
watched.
Mr
Mapenduzi believes northern Uganda MPs are not doing enough and are waiting for
NGOs to organise oil conferences.
“Our
MPs need to wake up and scale up their advocacy so that these issues are worked
on,” Mr Mapenduzi says, adding that the lack of local political proactive-ness
has left many people in the vacuum, although, at snail speed, being filled by
NGOs. But what happens when Gulu Woman MP and veteran politician Betty Aol Ocan
believes that the government just does not listen to leaders from the north.
“We will
try to push but while power is vested in the west, it is very rare that they
will listen to us,” she says. “We can only air our views but no one can take us
seriously.”
The
prime minister Acholi Chiefdom, Mr Kenneth Oketta, pushes the blame to Total Oil
Company, accusing it of not picking a leaf from Tullow Oil Company in Hoima by
involving the locals in its local programmes and employment.
Total
E&P operates in the Pakwach Basin, Nwoya District, which is believed to
have the largest reserves so far - 2.5 billion barrels.
While
Tullow is recruiting Banyoro to work in their deposits, Total, Prime Minister
Amama Mbabazi says, is playing hide and seek by only distributing vouchers.
“They
are doing divide and rule in the north. They deal with the Nwoya chiefdom but
they are doing nothing in the rest of Acholi. It should open up to the Acholi
region,” he says.
Oil, as
Bishop Macleod puts it, should be a blessing and government must be very honest
and sincere in dealing with the oil question. “There must be proper procedures
of transparency and equity so that resources from oil can benefit all Ugandans
rather than a few individuals at the top,” he says.
Another
centre of debate is the government’s decision to put the refinery in Hoima.
Commentators
think the decision was political and a residue of a political system that
survives by allocating resources on the basis of tribe and also show the
historical north and south divide in the history of Uganda. “If the ruling
government was coming from northern Uganda, there would be possibilities of
having the refinery in northern Uganda,” Dr Kisekka-Ntale, a social researcher
and political analyst, says.
“It has
some political connotations. So the context of whether more oil deposits are
found in the north than the south does not arise.” According to information
from PEDP, 21 oil and gas discoveries have been made in the Graben and 93
exploration and appraisal wells have been drilled on the different prospects
identified by the seismic data.
Out of
the 3.5 billion barrels of oil so far discovered, the north, particularly Nwoya
District, boasts of more than 2 billion barrels.
Given
that 60 per cent of the unexploited part of the Graben is in the north, the
thinking among some northern politicians is that the oil reserves in the region
are bound to increase, albeit the fact that Neptune consistently hit dry wells
in West Nile.
In an
email, PEPD Commissioner Ernest Rubondo said when demarcating areas for oil and
gas exploration, “government does not consider regions such as north or south.
Licensing is done according to Exploration Areas.”
Total
currently runs Exploration Areas 1 and 1A, home to Lyec, Ngiri, Mpyo, Jobi, Rii
Jobi-East and Gunya discoveries, with 31 wells so far. The government plans to
construct 60,000 barrels per refinery on 29 square kilometers in Hoima.
Residents in some 13 villages that are to be evacuated are in the process of
being compensated.
The
decision to put the refinery at Kabaale was made basing on the July 2010 Foster
Wheeler report, which noted that the leading sites (Kabaale and Biso) were
located south of Lake Albert near the oil fields.
The
Petroleum Exploration and Production Department notes, in an email, that during
the feasibility study it was put into consideration the fact that exploration
activities were being undertaken in the north and a possibility of making
discoveries there.
The
places that were considered to be possible refinery sites; Majanji, Biso,
Katebo, Bukakata, Lwampanga/Kasenyi were all dropped because PEPD says they do
not fit in the brackets of good land use, access to infrastructure, local
facilities, relative location to market, and requirements for crude
import-approximate length of pipelines.
With
the refinery in Kabaale, the government will have to construct connecting
pipelines to move the oil from all over the Graben to the refinery.
The
Ministry of Energy undertook a study that covers distribution and storage
facilities for petroleum products from the refinery. The study recommended a
refined products pipeline for transportation of refined products to a final
collection point in Buloba for distribution to retailers.
The
pipeline length is estimated to be about 205km. However, the study and its
recommendations are still under review by the government. Officials at PEPD say
research shows that refineries need to have an abundant source of water. Oil
refineries therefore are often located near navigable rivers or near a port on
seashores.
At the
minimum, a refinery has to be reasonably far from residential areas and there
should be infrastructure for supply of raw materials and shipment of products
to markets. The Kabaale site is close to Lake Mwitanzigye–Albert and is also
reasonably far from densely-populated villages.
“At the
end of the day the refinery will have to be somewhere and no matter where they
put it, someone will definitely complain. So the location of the refinery
doesn’t matter,” says Mr Mapenduzi. “What matters is that the north should
benefit from the resources because we are going to bear the highest risk,
especially in terms of the environment.”
Mr
Rubondo says although the north is not fully explored, the argument that more
wells may be found in the region is inconsequential as the refinery needs not
to be directly at the source of the oil.
What is
important is to have a crude evacuation system of pipelines through which crude
oil is transported to the refinery. And, yes, a study to evaluate the pipeline
and storage facilities for crude oil and gas in Uganda was concluded and
provides for pipelines from oil fields in the Pakwach Basin and southern fields
such as Kingfisher.
But Mr
Angelo Izama, an oil commentator, says taking the refinery to Hoima and not in
the north where bigger reserves are prospective, ignored the environment risks
that will be borne on the north, besides denying the north the benefits that
come with the refinery activities.
“If
production is located in the south, benefits of downstream business and collated
industries too will remain in the south,” Mr Izama, an oil analyst says.
“This
potentially sets up a situation where if there is an environment disaster it
will be politicised along regional divisions with potentially serious
consequences. At this current state a location in northern Uganda may be
viable.”
Although
he hinted on the land struggles in the north as a possible cause for moving the
refinery to Hoima, Minister for Political Mobilisation and the MP from Nwoya,
Mr Richard Todwong, says the oil that has been found in the north should be
treated as a national resource.
