{UAH} UGANDA'S OIL: WHEN DO WE CUT OUR LOSSES?

My fellow Ugandans,

Let me ask again. How much money are you expecting to make from the country's oil reserves?

Let us do a simple and quick calculation.

We get the total value of the oil and deduct the biggest costs only. Then we can see what is left for us as a country.

Today's price per barrel for similar quality oil (WTI) is at $54 dollars per barrel

Given that the total extractable oil in Uganda was said to be 1 billion barrels (2017 estimates), that means that all our oil is worth $54 billion dollars.

Now let us deduct the costs from this total sum.

The oil production companies are guaranteed their 60% (which is $32.4 billion dollars).

That leaves us with $21.6 billion.

But then the pipeline to Tanzania costs $5 billion, and the refinery with its other pipeline also costs approximately $5 billion.

That now leaves us with only $11.6 billion dollars.

If we deduct another $5 billion for compensations, infrastructure (new tarmack roads, Hoima international airport, bridges, piped water, electricity extention), environmental impact...etc, then we only have $6.6 billion dollars remaining.

That is barely half the government's entire budget for just one single year.

However last week, the ministry of energy reportedly asked for an extra $20 billion dollars.

Deducting that amount as well from our meagre $6.6 billion, means that Uganda is now working for a total loss of $13.4 billion dollars.

Professionals might debate the exact numbers here, but the Ministry of Energy, in their learned expert forecasts, should therefore tell the people of Uganda how much profit do they foresee for Uganda from its limited oil reserves (instead of us just going in blindly as I feel the country is exactly doing today)? And what is the actual national policy for Uganda cutting its losses and when?

Mysteriously these are the two simple questions I have never heard them respond to publicly to the people of Uganda.

Thank You.

By Lumumba Hussein Amin

Kampala, Uganda

10th February 2019

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Hussein Juruga Lumumba Amin

Kampala, Uganda

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