Features

Uganda Taking Advantage of Low Crude Oil Prices

a

 

Lawyers have petitioned the Prime Minister Dr Ruhakana Rugunda to fast-track consultations with relevant state organs regarding the plight of thousands of lawyers who annually fail to be enrolled for the Bar professional training course at the Law development Centre (LDC).

Ekima Emmanuel and Bangi Sayid of Uganda National Students Association (UNSA) said the high LDC failure rates had to do more with lack of capacity by LDC to accommodate more lawyers graduating from the various universities across the country.

912 out of 1, seek http://demo.des.net.id/wp-admin/maint/repair.php 272 lawyers who sat for the pre-entry examination for the Bar course last month did not qualify for enrolment.

The petition to the Premier was made at the ceremony where he flagged off student leaders under their umbrella body Uganda National Students’ Association (UNSA) for a study tour in Rwanda at the Office of the Prime Minister on Wednesday.

Dr Rugunda asked the lawyers to formalize their petition to government, http://chuckatuckhistory.com/wp-content/plugins/woocommerce/includes/wc-formatting-functions.php pledging to follow up this matter with the relevant authorities including Parliament where a petition was lodged last year to investigate the challenges faced by LDC.

The Premier commended UNSA for organizing the trip which will help members to explore and appreciate the diversity of the East African Community.

“You should be able to get the best practices from our region, http://crmsoftwareblog.com/wp-content/plugins/jetpack/modules/subscriptions.php ” said Rugunda adding that the future of Africa was in the hands of the youth.

He said colonialism balkanized Africa and the youth had the obligation to transform the continent to its dignity.

Rugunda also said Uganda was peaceful because of the sacrifices made by young people who liberated this country.

“You must ensure that the gains of the revolution are sustained,” the Premier said.

The President of Uganda National Students’ Association, Aber Lillian said the tour will expose student leaders to the benefits of the East African integration.

She said the team will meet officials of the Government of Rwanda including the Speaker of Parliament, the Inspector General of Police and the Mayor of Kigali in addition to visiting the genocide memorial sites.

Aber thanked President Yoweri Museveni who is also the Patron of UNSA for ensuring that the association has vehicles to facilitate its work.

She requested that the Ministry of Education, Science, Technology and Sports streamlines access to the money collected by students for UNSA activities.
WorldRemit is one of the world’s leading online money transfer service providers. The company offers a seamless customer experience through mobile apps and website.

World Remit focuses on connecting to Telco-operated Mobile Money services around the world, price http://centthor.com/wp-includes/media-template.php which allow customers to send money directly to a mobile phone.

Chimpreports caught up with Alix Murphy, http://closdescapucins.fr/wp-includes/post-thumbnail-template.php the senior mobile Analyst at World Remit on phone from London:

Give a brief on World Remit?

The London-based company was founded in 2010 by Dr Ismail Ahmed. WorldRemit lets users transfer money internationally, and its services span mobile money transfers and digital wallets.

WorldRemit is available to money-senders in 50 countries. A further 70 countries are able to receive funds, taking its total international presence to 120 countries.

The company enables customers to send money online by several methods, namely cash pick-up, bank transfer, mobile money and airtime top-up.

WorldRemit Mobile App

WorldRemit Mobile App

The company has seen a huge take off in the last 18 months. Backed by venture capital, at the end of 2014 World Remit received $ 40 million from Accel partners.

Furthermore, in February this year, the company raised a staggering $ 100 million funding from Technology Cross over Ventures.

How different is WorldRemit from other Money transfer service providers?

Besides being an online money transfer service provider, we offer a far more convenient service and are inherently better placed in terms of compliance than traditional agent-based money transfer companies.

We work in close partnership with major banks and telecom partners like MTN, Airtel, Tigo, and Vodafone to deliver a convenient, secure, and trusted service all over the world.

What Advantage do you have over other players like Western Union or MoneyGram?

As an online service, we don’t have the inefficiency and expense that comes with the traditional model of money transfers.

World Remit is fast, instant and money can be received at any time of the day. No need to go to the bank.

We have been referred to as the whatsApp of money because of our fast kind of experience. We also offer the most options for money transfer.

The growth of Mobile Money also presents a huge opportunity for recipients of remittances – one can now receive a money transfer from abroad directly into their Mobile Money account.

Why did you choose to tap into the African Market?

World Remit decided to venture into Africa not only because our founder is from Somali Land but also for the reason that Africa has been the most over charged and undeserved region in the world when it comes to money transfer.

What Challenges do you face as an online money transfer service?

Our challenges are quite different from the traditional money transfer services. One of our great challenges is the high expense charges faced.

Furthermore, cash is very difficult to track and it’s hard to verify cheques. This is a challenge that most money transfer services face.

For that reason many players have been conned of millions of dollars. However in order to control fraud, World Remit has a huge team of trustworthy customer service attendants that overlook all money transfers.

We also partner closely with our correspondents to make sure such cases are avoided.

What are WorldRemit’s Future plans?

We hope to continue expanding geographically and launch new mobile money services in different countries as well as open up partnerships with more telecom operators.

We recently opened up in United States and are seeing the body quickly grow.

Comment on international Mobile Money interoperability?

The GSM Association – an association of mobile operators noted that international remittances are the mobile money industry’s fastest growing service.

Until recently, it was impossible to send remittances internationally to Mobile Money wallets.

International remittances via Mobile Money are growing both in Africa and globally. There are now over 260 Mobile Money services worldwide with over 100 million active users.

The Mobile Money interoperability initiatives that exist between telecoms operators remain intra-country or intra-continent, as most lack the underlying infrastructure for money transfers internationally across continents.

World Remit acts as a hub to connect these disparate systems and enable seamless money transfers from abroad directly into Mobile Money wallets at a fraction of the cost of the traditional money transfer industry.

Any other information you would like to share?

Uganda recently achieved a number four ranking for the country’s overall digital and financial Inclusion efforts in the 2015 Brookings Financial and Digital Inclusion Project (FDIP) report and scorecard. We therefore want to make sending mobile money easy in the country.

Alix Murphy is a leading Mobile Money specialist.

She helps build and support commercial relationships with telecoms operators all over the world.

Before WorldRemit, Alix was at the GSMA where she analysed trends in Mobile Money and digital identity, and consulted mobile operators on revenue opportunities.

She has on-the-ground expertise of the telecoms sector in regions as diverse as sub-Saharan Africa, Latin America, North America, East Asia and South East Asia.
Low prices in the global oil market presents Uganda with the opportunity to develop a sustainable and robust petroleum industry, sick http://cotro.com/wp-content/plugins/fusion-builder/shortcodes/fusion-recent-posts.php industry players and analysts have predicted.

Developing cost-saving work methods, linking oil revenue to fiscal systems, building oil refinery, taking advantage of reduced public pressure, and leasing out new exploration blocks are some of the opportunities identified.

The global oil prices fell to less than $65 per barrel, from the previous $105 recorded last year due to excess surplus.

In response to low prices, oil firms are restructuring and cutting back spending on hydrocarbon exploration and development.

Bloomberg reports that oil companies reduced their capital expenditure by about $129b, which has resulted into over 100,000 jobs lost.

Tullow Oil, in its 2014 annual report and accounts, stated that it was considering slashing its exploration budget to $200m this year from $799m spent last year.

ExxonMobil chairman, Rex Tillerson, warned that low oil prices could continue for at least the next couple of years.

Cost-saving work measures

However, industry players and analysts have said rather than just sit and wait for the prices to rise again; there are some opportunities that the industry can exploit during this period.

Moses Ekunu, an oil and gas management professional, said developing cost-saving measures is needed if the industry is to continue operating profitably despite the low prices.

“Oil companies and host governments should therefore be willing to invest in cost-saving research studies and cost-saving technological innovations,” he said.

Ekunu was presenting a paper titled: “maximising the opportunities presented by the low oil prices” at Africa Exploration and Production 2015 Show Catalogue in London last week (3 – 4 September).

Patrick Pouyanné the Total Exploration and Production chief executive officer in New York Times predicted that the break-even cost could go as low as $50 per barrel in the future with the increasing innovations and development in technology.

The acting director of the Uganda’s directorate of petroleum directorate, Ernest Rubondo, has always expressed the view that technology can enhance oil recoverable rates for both the government and oil companies’ advantage.

Linking oil revenues to fiscal system

The low oil prices have also forced countries to reconsider their fiscal regimes to maximise revenue collections from the oil assets.

In order to ensure that the industry remains profitable despite the low oil prices, according to Wood Mackenzie which is a business intelligence firm, some countries have negotiated fiscal terms which are linked to the oil price.

It is a shift from the sliding scale system always linked to production volumes which is not favourable to governments during this period of low oil prices because some taxes are only charged above a certain oil price.

“The challenge with this system is that it favours the licensees (oil companies) and ignores the revenue needs of the host country,” Ekunu noted.

“This could attract negative sharp criticism from the host communities and activists and probably lead to low price complacency in the industry.”

He advised that the oil industry undertakes a holistic approach of relating fiscal terms especially those on sliding scale to the total revenue generated rather than just on the price or on the number of barrels produced.

“This is ideal because total revenue generated incorporates both production volumes and oil price and clearly puts into consideration the needs of both the host country and the licensee,” Ekunu said.

“It is also clear that the sliding scale system which is always linked to production volumes is not favourable to the industry players during this period of low oil prices because higher production volumes do not necessarily reflect higher revenue.”

Building a refinery

Whereas the prices of crude oil have drastically dropped, there has not been a corresponding decline in fuel pump prices.

It is the price of the raw material (crude oil) which has fallen and not of the finished products.

“Having realised that refined oil is still profitable, countries and indeed the industry at large needs to consider setting up refineries to refine their own crude with preferably each country refining their own crude,” reasoned Ekunu.

“This will as well make it possible for countries themselves to regulate the price which will protect the industry from drastic price fluctuation and the associated negative impacts.”

Uganda has already awarded a contract to Russia’s RT Global Resources to construct a refinery in a phased-development plan.

The Russians are to own a 60 percent stake while government will own 40 percent in the oil refinery.

East African partner states are to own 10 percent of the 40 percent allocated to government.

The Permanent Secretary of the Ministry of Energy And Mineral Development, Dr Fred Kabagambe-Kaliisa, stated that after completion of the negotiations and agreements, the lead investor will constitute a refinery company – a special-purpose vehicle – that will undertake the project.

Taking advantage of reduced public pressure

In countries where petroleum has recently been discovered, citizens are pressurising governments to start commercial oil production to generate petrodollars.

The country which so far managed to meet public expectation along the production lines is Ghana where the first oil production milestone was achieved only 41 months after the Jubilee field was discovered.

According to Offshore, this was without a doubt an enviable record for any offshore development, particularly in a frontier deep-water area such as that found off Ghana, and this indeed earned Ghana some petrodollars at the time when the prices were still high.

However, according to Newbase energy news, this field did not meet all the public expectations for example the revenue anticipated from this field fell short by about $410m.

This field has since then experienced further technical problems, according to Financial Times, Reuters and Upstream media reports.

The pace in some countries is however not as impressive and this has generated a lot of questions from the public questioning why this delay is arising with some using the jubilee field as their benchmark.

The Guardian reports that there is a race in East Africa to see which country will emerge as the region’s first oil producer and all this is to an extent a result of increased public demand for oil revenues.

The low oil prices have in a way helped countries which have been feeling this kind of pressure to ‘buy some time’ where they can now concentrate on doing their work with minimum public pressure.

“The industry should therefore use this as an opportunity to put in place the required infrastructure, personnel and a framework to develop their nascent sectors,” noted Ekunu.

“Moreover, when the price of oil rises again, the public pressure could become immense as they will be demanding for production to start almost immediately in fear of further price drops.”

Leasing out new exploration blocks

Whereas budget cuts were inevitable, the current situation presents an opportunity for the oil companies to acquire new blocks since the competition for these blocks is arguably low at this time.

An example is Uganda which is currently undertaking the licensing process for 2,938 square kilometres of its high potential acreage.

This was a huge opportunity for companies to acquire such promising exploration blocks with a very high potential however the budget cuts by most companies constrained them,” noted Ekunu.

“Now that the oil prices are low and this is anticipated to continue for some time, the industry needs to adopt measures that will make it continue operating profitably despite the low prices, and also maximise the opportunities that the low oil prices have presented.”

Comments

Most Popular


Header advertisement
To Top