Source: ISN Security Watch

By Jody Ray Bennett

10 Jun 2010 - Uganda’s recent oil discovery has the chance to reshape relations with its neighbors and the West as energy multinationals eye potential opportunities.

The Great Rift Valley of East Africa - the birthplace of humankind - holds a reservoir of billions of barrels of untapped oil. Over the last four years, UK-based oil exploration and production company Tullow Oil has discovered reserves of nearly 2 billion barrels of oil in rural western Uganda, with the largest finds in the Lake Albert Basin.

In what is now being called the largest onshore oil discovery in sub-Saharan Africa in 20 years, Tullow believes that this drilling area will yield “several billion” barrels of oil; and at least 15 major strikes by various oil companies have been made throughout Great Rift Valley since Tullow’s discovery. (See this article to view Tullow’s drilling area with further analysis.)

Now as with any new resource discovery, especially on the African continent, and especially when it involves a private company from a former colonial power, questions begin to emerge about the host country’s negotiating power and the regional and international relations implications of the find.

Uganda is now at this point: It is a potentially new wealthy oil state, landlocked by its neighbors who are watching enviously as petro dollars promise to double Ugandan state revenues. The country is also being eyed by other international actors who wonder how oil might shape relations that were once based primarily on non-energy trade, the country’s captive labor pool and military training exercises with Ugandans as a part of a larger strategy to thwart terrorism in Horn of Africa.

Uganda’s oil discovery is also being compared to what is often cited as the Nigerian “petroleum curse” in which “billions of pounds in oil revenues [are] siphoned off by corrupt leaders while communities in the environmentally scarred, oil-producing regions still live in poverty.”

Still, others have identified the ongoing employment of Ugandans as private security contractors, trained and shipped off to Iraq by western private military and security companies, as a security advantage for Uganda. Their training in Iraq could come in handy on the front line of security for Uganda’s new oil infrastructure.

For the complete article, please see ISN Security Watch.