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Iran's entry into our oil industry may commence the oil curse in Uganda |
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Recent reports indicate that Uganda has dropped the idea of the Early Production Scheme (EPS). The idea of dropping the EPS came after companies revealed that they have discovered and that they expect to discover more oil wells in many parts of Uganda.
The EPS was mainly for the development of Tullow Oil company’s oil wells.But following the discovery of 300 million barrels of oil reserves and a small amount of gas at Nzizi, and more discoveries in Amuru and other parts of the country, the government decided to indefinitely suspend the EPS. Now, about 600 million barrels of oil and 14 million cubic metres of gas are estimated to be the current total oil and gas reserves of Uganda and there are these increased reserves that have encouraged the government to commence plans for building a bigger refinery as opposed to a mini-refinery under the EPS.
The New Vision of 17th May 2009 reported that when President Museveni met President Mohmoud Ahmadinejad of Iran last Month, Mr. Museveni invited the Iranian government and companies to come and invest in Uganda’s oil industry, and responding to Museveni’s request, the President of Iran promised to fund the entire value chain of Uganda’s oil production and jointly fund the construction of an oil refinery in Uganda. Iran also expressed interest in training Ugandans in her University of Petroleum and other oil institutions in Iran.
As we continue to spend all our efforts to promote good governance in Uganda’s oil industry, the above fundamental developments impel us to critically analyze the social, economic and political implications of such moves. In this respect, we must appreciate that while the proposed Iran’s entry into Uganda’s extractive sector might quicken the speed for the development of the oil sub-sector in the country, it is also important for Uganda to first assess the level of democracy of Iran as a country and the practices and profile of the Iranian oil companies themselves. So, the decision to invite or allow Iran in Uganda should not be based on political convenience by the President or quick fix for short gains but rather, it should base on clear research that shows whether or not Iran is socially, economically, environmentally and politically placed to exploit Uganda’s oil for the good of Ugandans.
At the moment, most of the evidence available indicate that Iran is a country that has high rates of chronic economic mismanagement, high un employment levels, rising inflation, freedom to operate in business is difficult with restricted foreign investment in oil and gas and, corruption is one of the highest in the world. Iranian oil companies also don’t have good records for environmental conservation and respect for human rights. In the United Nations circles, there is an international concern about Iran’s support for terrorism and its nuclear development activities remain a big threat to mankind on the globe including Uganda. Iran has refused to provide clear information about her nuclear programme and continues to deny the United Nations’ nuclear experts to inspect her key nuclear facilites.
The above global concerns together with the existing economic sanctions by the United Nations clearly serve to indicate that Iran is not the best choice for our oil development. Currently violent protests and demonstrations are going on in the country over the recently concluded presidential elections where President Mohmoud Ahmadinejad who has been in power won the elections. The Iranians are protesting against the elections which they believe were not free and fair and that the results do not represent the people of Iran. Even in Uganda, the Supreme Court decision in the two Presidential Petitions of 2001 and 2006 by Dr. Kiiza Besigye against President Yoweri Museveni and the Electro Commission indicate that both the 2001 and 2006 Presidential Elections were not free and fair and did not comply with the law. Right now, evidence from Transparency International indicates that Uganda is currently the third most corrupt country in the world. This clearly shows that it is at the moment risky to bring in Uganda another corrupt country to run our oil industry.
Looking at what is going on in Uganda where there is lack of access to information about the oil industry despite the Access to Information Act, the choice for Iran will worsen the situation. Right now, oil contracts between the government and oil companies remain closed to the public, environmental impact assessments are conducted without effective public participation, oil exploration licenses are issued without open bidding and the continuation violation of the freedom of the press and CSOs is a clear sign of how bad things are already in Uganda.. If you add these bad circumstances already prevailing in Uganda with what is happening in Iran, you clearly see that allowing Iran in Uganda will make the life of Ugandans amidst oil more miserable. And as such, Iran should not be allowed in our oil industry until it has improved her democratic credentials.
Africa Institute for Energy Governance strongly believes that Uganda will be better off disassociating itself with Iran and if Iran is the only country to develop our oil industry before Ugandans are convinced that it will live by the highest standards of good governance for the betterment of the citizens, we must advise our government to keep our oil underground until we get better and democratic investors. If oil and Iranian activities will make Bunyoro another Niger Delta of Nigeria, Kabinda of Angola or Abeyi of Sudan, then, we have no choice but to call upon Ugandans to oppose the entry of Iran in our oil extractive sector. We advise our government to put strong institutions, relevant laws and policies in place, and we are convinced that good laws, plicies and institutions will attract democratic countries reputable oil companies to come and invest in Uganda for social, economic, environmental and political development and the betterment of the citizens.Doreen Katusiime
Programme Assistant
Africa Institute for Energy Governance
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