Uganda's oil development remains under threat

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 24 -- Uganda's growing oil industry could be subject to attack by a new rebel group now recruiting local people in districts around the Albertine Rift, according to military officials.

“In addition to the social cost that would inevitably follow renewed hostilities in the region, an insurgency poses serious downside risks to oil production from the Lake Albert Rift basin,” said analyst BMI.

The Ugandan army is aware of plans to destabilize the oil region and aims to ensure that it does not happen, according to the country’s defense and army spokesman, Major Felix Kuraigye, who said that any rebel threat would be countered by the government.

The Ugandan army last week brought to trial 11 rebel suspects, all of them and others still at large members of a rebel group called the Popular Patriotic Front (PPF).

According to court documents, the men were recruiting others to fight the Ugandan government in the north and northwestern region, mainly the Masindi and Amuri districts, where the country’s recently discovered oil reserves are located.

The arrests follow earlier reports that the Ugandan army is considering military operations against rebels of another group, the Allied Democratic Forces, which was holed up on the Congolese side of the oil-rich Albertine Rift.

Ugandan Gen. Aronda Nyakirima told a television audience that the ADF rebels were a threat to the national security. He said the army was considering joint operations with the Congolese army and the United Nations Organization Mission in Congo (former Zaire).

The ADF rebel threat coincided with talks between Tullow Oil PLC, which already has operations in Uganda, and the Congolese government about oil exploration rights across the border in Congo.

The announcement concerning rebels comes amid a host of other potential problems facing Uganda’s oil industry, not least, social activists seeking greater transparency in contracts and others concerned about environmental impacts of oil exploration and development.

Ugandan activists last week said they plan to sue the government for failing to reveal the contents of the oil production agreements signed with exploration companies operating in the Albertine Rift.

Dickens Kamugisha, president of the Africa Institute For Energy Governance, said his organization, along with the National Association of Professional Environmentalists, is leading a campaign aimed at forcing the government to make the agreements public before any oil production starts.

By refusing to reveal the oil contracts, activists say, the Ugandan government and the oil companies could be cooperating on a hidden agenda to deprive the Ugandan people of the benefits of oil production—a claim denied by both the government and the companies.

The rebels and activists are joined by environmentalists in their concern over the impact of oil exploration and development in the country.

"Although environment impact assessments have been undertaken, and mitigation measures proposed, the current activities are already having impact on wildlife, the ecosystem and the human environment," said the National Environment Management Authority.

“The ongoing oil exploration in western Uganda will disrupt wildlife conservation in the region if it is not well-planned,” the group said in its 2008 annual report, which was published on June 18.

Among the companies prospecting for oil in Uganda are Heritage Oil Ltd., Tullow Oil, Tower Resources PLC, and Dominion Petroleum Ltd.

Contact Eric Watkins at [email protected].