Kampala — The Government has set down some stringent terms for oil companies intending to help Uganda exploit its oil resources.

Oil exploration has been going on for about 10 years in the Lake Albert region and recent findings indicate that there might be reserves of up to two billion barrels, valued at about $50b.

Recent events where Heritage Oil, one of the prospecting companies, attempted to sell its share of a concession it owned in partnership with Tullow, to Italian oil major ENI, have brought issues in the sector into sharp relief.

Heritage and Tullow specialise in oil prospecting, leaving the final exploitation to the bigger oil companies whose expertise is to extract, refine and distribute the oil products.

The Government estimates that it would need at least $8b to exploit Uganda's oil. This would go towards oil processing, transportation, refinery development, further drilling and storage and pipeline infrastructure. And this investment will last up to 2020.

As a consequence, the Government has decided that they will only be interested in companies whose market value is at least $24b or three times the required investment.

This is the first time Uganda is dipping its toes into the oil business, but we need not re-invent the wheel as other countries have gone through the same process.

Some have managed the process well but many, especially in Africa, have mismanaged the process scandalously. The common denominator among countries that managed their oil well versus the bad managers is their transparency, to involve the population through constant communication, policy formulation and transparency in bidding processes.

A policy on oil exploitation is yet to be put before the public and other aspects of the oil sector are a tightly guarded secret. All these are ominous signs for the sector and our country.

The Government should be more open so the proceeds can permeate to the last citizen of this country.