It was reported earlier this week that Oranto Petroleum – one of Nigerian many emerging indigenous oil and gas corporations – has secured two production sharing agreements with Uganda to explore for oil and gas around Lake Albert.
Oranto Chairman, Arthur Eze expressed his exciting at the opportunity to enter into the agreement, stating that “Lake Albert is home to some prime petroleum acreage”.
Oil was discovered in Uganda in 2006, near its border with the Democratic Republic of Congo. Production is due to begin in 2020 with estimated reserves of up to 1.7 billion barrels.
There was speculation that the Ugandan economy would be transformed by the discovery. I am highly sceptical for a number of reasons.
Uganda's total recoverable oil reserves is now estimated to be around 2.2 billion; a fraction of the 37.2 billion barrels that make up the proven reserves Nigeria. Uganda is therefore not going to become a petrostate any time soon.
There is also Uganda's reputation for endemic corruption. Something on which Nigerians' do not have the cleanest of records.
Nonetheless, we should be pleased to see home-grown Nigerian firms moving into other parts of sub-Saharan Africa.
With their record of oil-spills and their inability to engage with local communities, resulting in militancy and degradation, international oil companies have proven themselves inferior to African-originating firms.
Any country in Africa with a developing extractives industry, should put African firms at the top of their tender lists. They know how to build businesses on the continent where others have failed.