Last week Uganda decided that the oil pipe line from the
western oil fields will go south through Tanzania rather than through Kenya, as
was earlier expected, a decision that served to open up old wounds and
threatens to shift the region’s economic center of gravity.
The Kenyan route through Lokichar and onto Lamu, was
discarded on account that it would be more costly to develop due to expensive
land compensation claims, its passing through environmentally sensitive areas
and the state of unpreparedness of the Lamu port, which was deemed too shallow
and exposed to high tides, less than ideal conditions for oil tankers to
operate in.
The route through Tanzania to Tanga port was shorter –
though not by much 1500 km through Kenya as opposed to 1,410 km through
Tanzania. This would be factor though as the waxy nature of Uganda’s oil which
solidifies below 40 degrees centigrade necessitates heating plants every so many
kilometres. In addition because all land belongs to the state in Tanzania
compensation would be kept to a minimum and leases secured faster.
It also helps that Tanga port is already up and running
unlike Lamu. This would mean Uganda’s first oil exports have a better chance of
being realised before 2020 using the southern route.
"And it did not help that Kenya has not established commercial viability of their oil finds in the north...
This was important for
both countries but more so for Uganda, because if Kenya didn’t have viable
quantities to ship out Uganda would find itself carrying a disproportionate portion
of the piping costs.
While Tanzania has no oil deposits of its own to share the
pipeline there gas reserves are convenient as heating fuel for the length of
the pipeline. In addition the development of infrastructure through southern
Uganda as a plus given the unexploited iron ore deposits in the region.
Of course Kenyan officialdom and the business community were
left unamused at the latest development. Some commentators went as far as to
accuse Uganda of playing off its neighbours against each other, sticking it to
Kenya over some unresolved and unclear past slights and threatening to
jeopardise the joint multi-billion dollar Standard Gauge Railway(SGR) project.
The Mombasa to Nairobi leg of the SGR is already underway
and will cost about $5b while the $8b has been earmarked for the Malaba-Kampala
leg.
The economics of the project were lost in the hysterics.
It is understandable that Kenya Inc should be concerned.
"Fashioned as a colony the British never saw themselves ever leaving, like South Africa or Zimbabwe, the other territories around it were fashioned to feed into Kenya’s industries, leading to its regional economic dominance, a situation that persists to date...
However with Uganda’s economy finding its feet over the last
three decades and Tanzania’s embarrassing wealth in natural resources – natural
gas, gold and other minerals, means Kenya is increasingly having to see itself
as first among equals rather than the 800 pound gorilla straddling the region.
Channelling Uganda’s oil, the fourth largest reserves in
sub-Saharan Africa, through Tanzania threaten to redress historical regional
economic imbalances. Uganda’s reserves are estimated at 6.5 billion barrels of
which about 1.5 billion are recoverable.
It is not unreasonable to believe too that the accompanying
improvements in infrastructure along the pipeline will make the much neglected
Tanzanian route to the sea more attractive for Ugandan, Rwandan and Congolese
commerce, a worrying situation for Kenyan transport interests.
And finally with tensions in South Sudan beginning to ease off
-- rebel leader Riak Machar was sworn in as Salva Kiir’s vice-president, the issue of an oil pipe line
to the coast will be revived, only this time there will be an alternative through
Tanzania to the Kenyan route.
"It is safe to say that when history is written the events around the evacuation of Ugandan oil to the sea will be seen as an inflection point in the region’s geopolitical alignment...
It is not only about the oil, but then again it is.
No comments:
Post a Comment