{UAH} Why I fear the Ugandan oil investment project could turn out a white elephant

Why I fear the Ugandan oil investment project could turn out a white elephant.

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By Moses Bukenya

The Ugandan press isn't doing justice to Ugandan Citizens in terms of analysis and dissemination of information on the pros and cons of the oil deals and any developments therein. We are therefore left with no option but speculative analysis. Given the record of scanty public accountability, can we rely on pockets of information released by government in the absence of independent investigative analysis? Do we really have investigative journalism capable of unmasking such complex but deals of National importance?

I have followed some of the back and forth deals in the oil sector to a point where I started developing suspicions about the whole project. Those who have followed with me should be aware of the continuously moving targets for commercial production, pipelines and the refinery.

The share of the purported Capital Gains Tax proceeds in the wake of the initial farm down agreement in what was famously known as the presidential handshake was a red flag. Subsequently, Total suspended or rather rescinded the contract blaming their action on an unfair tax regime as well as the legal and regulatory framework.

Total and CNOOC seem to have finally agreed a partnership agreement with Government and Tallow oil but one wonders what the previous excitement involving handshakes was all about.

It appears to me that going forward, CNOOC, a Chinese Oil giant incorporated as recently as 1999 and UNOC a Ugandan oil Company are starting to take centre stage in the oil project. Do I need to over emphasise the prevalence of local investors that disguise as Foreign Direct Investments (FDFs) working through foreign agents but bring nothing but their foreign citizenship?

Why would Tallow oil or subsequently Total Ltd give up a viable project in which they invested billions of dollars before commercial production kicks off?

Isn't it possible that the cost recovery strategy that's at the centre of the protracted renegotiation of the farm-down would eventually transfer the risk and financial burden of what they've already assessed as a none viable project (White elephant) to the Ugandan tax payer through UNOC with our excitement?

Why is it that all of a sudden, oil exploration and commercial exploitation is becoming a huge African investment akin to the importation of second hand clothing commonly known as Mivumba? Why now when the global price of a barrel of crude, related futures and derivatives are at record lows?

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"When a man is stung by a bee, he doesn't set off to destroy all beehives"

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