[UAH] The politics of the oil refinery and the disgruntled north
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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.
The controversies
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.
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