Hoima getting ready for Uganda's oil riches

2015-05-10 11:41

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Hoima - Before the discovery of large amounts of oil in Lake Albert, Hoima was a forlorn and remote town in Western Uganda, whose main sources of income were farming and the trickle of tourists heading to nearby national parks.

A decade later, an oil-fuelled boom is transforming the town nearest the lake, with smart new office blocks and hotels drawing scores of new businesses and people from engineers to prostitutes to bankers.

But with the east African nation yet to pump a single drop of oil, this rapid development may be premature. Oil executives say production will start in 2018 at the earliest.

Exploring for oil

"Everybody in the country and the region is looking at Hoima," said Betty Tibesigwa, manager of Rosaline Suites, a new hotel and office complex that is home to Chinese oil company CNOOC's operations in Uganda.

"People from all over the world will be visiting Hoima," she said enthusiastically. "We're coming in to offer services at the standard one would expect of a town with such promising and booming business."

CNOOC, Britain's Tullow Oil and France's Total are among companies exploring for oil beneath Lake Albert, a pristine body of water in the heart of the Rift Valley estimated to contain crude reserves of 6.5 billion barrels.

The discovery of oil there about 10 years ago unleashed dreams of an economic windfall that would lift Uganda's 38 million people out of poverty but development has proceeded at a snail's pace, stymied by spats over planning and taxes.

Developing oil fields

Officials are now eyeing 2018 as the start of production, but Kaboyo believes this is still too optimistic, pointing to infrastructure delays such as a $4.5bn, 1 300km export pipeline to the Kenyan coast that has not yet been started.

The tender to build a $2.5bn domestic refinery was awarded only early this year, to Russia's RT-Global Resources, and construction is not expected to start before 2016.

Government economists estimate that developing the oil fields will cost $15-22bn, against $50bn that Tullow says the country could earn from crude sales during the lifetime of the Lake Albert fields.

Read more on:    uganda  |  oil  |  east africa

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