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Great care needed as EAC enters oil industry
2005-11-09 09:08:02
By Editor
Yesterday we carried a story about the start of negotiations between the East African Community (EAC) and the Organisation of Petroleum Exporting Countries (OPEC) on the possibility of the former borrowing appropriate oil exploration technology from the latter.
Announcing this at a broadcasters’ conference in Arusha recently, an economist with the EAC, Dr Nyamajeje Weggoro also disclosed that the partner states in the EAC were jointly conducting oil exploration on shared sedimentary basins in the region.
He said work was going on in the region to identify the sedimentary basins that have been found to bear the ’ golden liquid’ together with their potential, so as to provide a fiscal and legal framework pertaining to the equitable and sustainable utilisation of the natural resource.
He said if the partner states started exploiting its oil, it would save them about 50 per cent of the expenditure, set aside in importing oil and its products every year.
We can only hope that it would be a great relief, as envisaged, to the foreign reserves of the EAC nations, as experience has shown that great care and judicious approach are needed to ensure that the oil extracted not only benefits the people of the country in question, but also should not be the a cause of squabbles among the states.
We can give some examples. Nigeria, one of Africa’s largest oil exporting nation has been known to import some of its own oil requirements.
The country’s oil industry has also been accused of not paying any attention to environmental conservation as well as not improving the lives of the locals, many of whom are burnt to death each year while pilfering oil from pipelines.
Nigeria itself is in bitter dispute with neighbouring Cameroon over oil exploration rights in the Bakassi region of the Gulf of Guinea, the dispute that seems to have defied any solution despite attempts to refer the matter to international arbitration.
It is also believed that one of the causes of the bitter war in the 70s between Somalia and Ethiopia, the Ogaden War, was oil, said to have been discovered in the border area between the two countries.
Former Zaire (now DRC) under Mobutu Sese Seko was at one time locked in dispute with neighbouring Angola over oil near the latter’s Cabinda enclave. Cabinda, where most of Angola’s oil is extracted, is bordered by the DRC and the Atlantic Ocean.
Despite its vast oil reserves, Equatorial Guinea has not been able to make the acquired richness benefit its people, the majority of who are still reeling in abject poverty.
There was also a coup attempt in 2003 said to have been planned by foreign mercenaries.
The age long problems of southern Sudan (including Darfur) could also, in part, be attributed to oil, as it is said great oil reserves lie under the area that also borders Chad, itself now an oil exporter.
In the home turf, we have already seen how persistent reports of possible oil deposits in Pemba (part of Zanzibar) started to generate some heat within local politics.
According to Dr Weggoro, Pemba is an area with oil potential.
The given examples underscore the need for the EAC states to learn from them, as they prepare to enter the turbulent oil industry.
It is an industry where domestic as well as international politics play a hand and if care is not taken, we might find ourselves becoming pawns of the big power chessboard. We can avoid commotion in the home front.
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