26 October 2009

East Africa: Smell of Petrodollars - Black Gold Discovered in Region

It is certain that Black Gold has been discovered in East Africa. The smell of petrodollars is literally hovering within proximity with confirmed reports that Uganda has discovered oil.

And just as the news begins to filter in, Kenya is on the brink of a repeat performance in a little while.This is certainly the best news for the region as the clock ticks in time towards the celebrations of the decade of existence of the regional integration process.

Somewhere in a sleepy town in north western Uganda bordering Lake Albert, the rugged terrain is not just that anymore. Soon, the vicinity is to be re-branded into a village worth billions of shillings after 23 years active years of oil exploration.

The Ministry of Energy in Uganda has recently confirmed that out of the 34 excavated wells, 32 are commercially viable for oil.

On the other hand, Kenya's Minister for Energy Kiraitu Murungi said last week the country would discover oil shortly. According to Murungi, Kenya government shall in two weeks time confirm the presence of deposits in Isiolo off the dry and patchy northern Kenya. Already, Kenya has invited Chinese investors to consider drilling the five- kilometre deep well for explorative measures.

In the past, it has also been reported that oil deposits were found in the isle of Zanzibar The last I heard of the matter though, was when media reported that authorities in Mainland and the archipelago had gone raucous over the possible discovery and whether contribution of the resource should be for the benefit of the Union or the isle.

Immediately, I see benefits of the discovery of the resource and Uganda's case is of particular interest with pundits noting the reserves are adequate for the EAC and the Great Lakes region for the next 30 years.

It is hoped the discovery in the region shall translate into better life for the inhabitants. In my view, whether it shall immediately or not translate into reduced prices of petroleum is debatable for now. One thing that is for certain though, is the positive potential impact the EAC stands to gain and the degree of economic growth it shall spur.

The Treaty establishing the EAC realizes and relishes the concerted efforts of the Partner States towards fostering co-operation in matters dealing with natural reserves.

In the juxtaposition, perhaps, it is time for the region to harness the resources together in attracting investment in the oil and other fields, including carrying out joint explorative assignments. The EAC can also harmonise regulations on mining and extraction to ensure friendly and sound exploration policies.

The six million dollar question is if and when we shall consider joint drilling in such matters or if the sovereign clause will deter attempts to enhance the scope of cooperation. The other area that the region could benefit is for example in the pooling of resources to construct another refinery -this time in Uganda, to complement the efforts of the existing infrastructure at the Kenyan coast.

There is need for soberness and calmness in light of the region joining the club of oil producers in the continent. The tendency to delight in and fall short of the glory of development is a reality. The thing about the continent is that resources tend to lead to conflict instead of prosperity and this is the "African curse" the EAC must steer clear of.

Resources such as oil touch on matters of sovereignty of the involved parties. Whereas there is international law that governs relationships between sovereign states, it is instructive that within the precinct of regional integration, Partner States cede some sovereignty to enable the realization of fast and balanced regional integration. In signing the Protocol, the Partner States indeed resolved to act in concerted mode to achieve the objectives set out in the Treaty.

There needs to be a framework that defines where sovereignty ends and cooperation begins.

The writer comments on socio-economic issues and is based in Arusha

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