The World Bank group has said decline in global oil prices should not discourage the development of the oil industry in Uganda as the resource will be pivotal in economic development.
The World Bank says the reason why Uganda and the oil companies exploring oil should not lose hope is because there is hope that global oil prices will pick up and stabilise in the near future.
The oil prices have now fallen by more than half since June 2014, when the prices stood at $110 (about Shs314,000) per barrel to the current price of under $50 (about Shs143,000) per barrel.
Speaking during a meeting to disseminate the findings of a study on the National Content Development in the oil and gas industry in Uganda yesterday at FairWay Hotel, the World Bank country programme coordinator for Burundi, Tanzania and Uganda, Mr Sajjad Ali Shah said even before oil production commences and oil revenues start coming in, there are benefits to be reaped from the sector.
“Despite the current oil price slum, discovery of resources offers a unique opportunity for Uganda to leverage the sector for broader national development. Oil revenues can be used to finance priority domestic investments crucial for diversified economic growth,” he said.
The title of the study on the national content development in the oil and gas industry of Uganda is “Leveraging Oil and Gas Industry for the Development of a Competitive Private Sector in Uganda”
Mr Sajjad said Uganda government needs to develop skills and capacity of the people of Uganda in other sectors of the economy such as agriculture, tourism to provide services that are going to be needed in oil industry so as to reap big from the development of sector.
Mr Sajjad said: “Opportunities for supplying the oil industry with various products and services are immense.”
He added that World Bank is supporting Uganda in its efforts to develop the oil sector revealing that about six months ago, the executive board of the World Bank approved $145m (about Shs413.9b) credit for the Albertine region’s development focusing on the infrastructure development and skills.
“We have also been engaging with the private sector under our Competitiveness and Enterprise Development project. And working with the Ministry of Energy and Mineral Development, and with Petroleum Exploration and production Department, by providing technical assistance in development of a comprehensive capacity needs assessment and development plan,” he said.
Uganda is now in the final stages of developing a National Content Policy for the petroleum sector which will see the country having strong oil and gas industry.
The permanent secretary in the of Energy and Mineral Development, Fred Kabagambe –Kaliisa said the discovery and confirmation of commercial petroleum resources in Uganda in 2006 created excellent opportunities for the country but also brought forth key challenges including the need to fast-truck the development of skills and expertise and ensure national participation in the oil sector.