Oil Find In Uganda Cause For Hope, Caution

An oil exploration tower is pictured in Tonya on the shore of Lake Albert on April 25, 2008. i i

An oil exploration tower is pictured in Tonya on the shore of Lake Albert on April 25, 2008. Walter Astrada/AFP/Getty Images hide caption

itoggle caption Walter Astrada/AFP/Getty Images
An oil exploration tower is pictured in Tonya on the shore of Lake Albert on April 25, 2008.

An oil exploration tower is pictured in Tonya on the shore of Lake Albert on April 25, 2008.

Walter Astrada/AFP/Getty Images

There's an old joke about how British colonials first laid claim in the late 1800s to the land that is now called Uganda. As the Ugandans tell the story, the land grab happened faster than you can say "Amen."

Here's Jane Nyendwoha's version: "When the white man came, he came with a Bible, eh? And they told us [to] close our eyes" and pray, she says. "So by the time they opened, their land was gone."

That old joke has new resonance in the Lake Albert region. This is where Uganda's oil is. Experts say there's enough oil around Lake Albert to make the country a top producer in Africa. And if all goes well, Uganda will begin commercial production in the next year or two.

But a lot can happen between striking oil and striking it rich. And the people at the lake are hoping they won't get swindled. As Nyendwoha likes to say, "This time, our eyes are open."

She works for Tullow Oil, a London-based company that has a contract with the government of Uganda to explore the area.

Another British-based company, Heritage Oil, also has a contract to explore. But few Ugandans outside President Yoweri Museveni's inner circle know the details of these contracts. So there's a feeling of cautious optimism in western Uganda, where pale green cliffs rise over the great, silvery lake.

A Boon For Some Locals

Kubalirwa Nkuba, a county leader in the region, says Ugandans want the oil companies to do right by them.

"They must have an agreement with government on how they're going to operate and what would be the benefits," he says. But he hasn't seen one yet.

Nkuba's office is in a town of rickety storefronts called Buliisa, where a gathering of idle men sits across from the Tullow Oil office, listening to country-and-western music.

With recent oil exploration, Nkuba says life has gotten much better for people in the town. A decade ago, there were no phones in Buliisa. Now, there is cell phone service. There are roads and vehicles.

Tullow Oil has brought HIV testing and educational opportunities to the area. And for those in the fishing business — or cattle-raising or farming — there is a chance to make money now since oil explorers have to eat, too.

"Fish, milk, eggs, meat, sugar, cooking oil. What can be got here, the locals are supplying," Nkuba says.

Nkuba is pleased with his prospects — both material and political. In what many outsiders might view as a conflict of interest, he already has contracts with Tullow to supply beef and fish to the company's camp on the outskirts of town.

Plus, he's got job security as a politician. To cut down on tribal feuding here, Uganda's president has proposed a plan that favors the indigenous people of the area — above all others — for political office. The president calls it "ring fencing" — and it means that Nkuba's Bagungu tribe has a lock on local politics for the foreseeable future.

Nkuba says it's only right. "I know more problems about Bagungu because I'm a Bagungu myself and, therefore, can handle the Bagungu much better than anybody."

Concerns About Transparency

But political ring-fencing isn't democratic. And Museveni, Uganda's president, insists he is running a democracy, despite international worries over rampant corruption, human rights abuses — and a lack of transparency in the oil business.

Many in parliament say they don't want Uganda to end up like Nigeria, where oil benefits only a few individuals.

Tamale Mirundi, the president's spokesman, says Ugandans know all they need to know about oil in the country — and when the president has more to add on the subject, he will.

"The president is not hiding anything. The opposition are trying to use oil to incite our people," he says.

And yet, everyone is hoping that the treasure underground will more than make up for the irregularities between people on the surface.

The Great (Viscous, Landlocked) Hope

Much of the lake area is national park, but that hasn't stopped oil exploration. Capped oil wells pock the fresh green landscape like little patches of dry skin. The sound of generators pumping water from well to well is as common as birdsong.

Tullow Oil estimates that Uganda could be sitting on 2 billion barrels of oil. The bad news is that the oil is as waxy and viscous as shoe polish in a can. It will be expensive to maintain a continuous flow. But there's good news, too.

Kenneth Opitto, who manages Tullow's field operations in Uganda, opens the cap on well called Kasamene-1. "This is 700 meters. All these wells around this area are very shallow," he says. "It is cheaper to get there because of the amount of equipment that you use and the length of time you spend here. This normally takes us two weeks to drill and get to total depth."

Right now, nothing much is going on, which is why some sleepy frogs have clustered near the drill hole. Tullow says commercial production will begin sometime next year. And then comes the tricky part: Uganda is landlocked. A pipeline will cost a fortune to build, and, so far neither Tullow nor Heritage Oil has the money.

Uganda's president also wants a refinery. But Heritage Oil has announced plans to leave Uganda. As Heritage exits, Tullow is hoping to attract a bigger partner to help pay the bills — maybe the French, or the Chinese.

Not Rich, But Less Poor?

But these days, the only overtures coming into Tullow's Uganda offices are from locals who need jobs. Shera Abdulrahmin Juma is desperate.

"I have no job," Juma says. "But I am moving up and down, searching for my people at home to eat. That is my problem."

Juma is skinning the leg of goat under a tree and preparing to grill it for some of the idle men sitting across from the Tullow office. But Juma also has a family of eight to feed.

"If there is any opportunity from Tullow, let them give me job, so that we can maintain. Any job they give me, I will be working on it," Juma says.

Most people here know they will never get rich from oil. But oil could make them less poor than they are now. And for many, that would be enough.

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