Government is deeply worried its 6.5Billion barrel oil fields in the west of the country could be rendered worthless in a few years, if its extraction is delayed any further.
With the world steadily turning away from the use crude oil, government fears the oil prices could drop below feasible levels before Uganda embarks on production.
ICT minister Dr. Elioda Tumwesigye, who is also the Chairman of the NRM Party in Sheema district, yesterday told Mbarara district leaders that the ruling party is working round the clock to avert this possibility.
During the meeting to discuss the implementation of the NRM manifesto, Dr Tumwesigye told leaders at the Mbarara district offices in Kamukuzi, that government is doing everything possible to expedite oil extraction and production.
“We want to sort out this oil problem. We know very well that not long from now, oil will be rendered useless,” said Minister Tumwesigye.
“The oil prices will continue to drop because the world is steadily moving away from petroleum, owing to its devastating impacts on climate change. Countries are now turning away from petrol and diesel cars to electric and solar power ones,” he warned.
Late last month, Britain joined France in pledging to end the sale of new petrol and diesel cars by the year 2040.
Norway and India have also said they want to get rid of petrol and diesel cars, and at least 10 other countries have set targets for electric cars.
The Minister noted, “In 20 or thirty years, oil will be of very little use; yet we still have it in the ground.
“That is why we are investing a lot of money in getting it out and putting it on the market before the prices plummet further.”
Minister Tumwesigye highlighted government’s commitment to finish both its $4billion Refinery project which will be built by a consortium led by General Electric of the United States; as well as the Uganda–Tanzania Crude Oil Pipeline (UTCOP).
The 1,445 km planned pipeline is expected to be built at a cost of US$3.5 billion.
Minister Tumwesigye says that the oil dividends once maximized will help Uganda industrialize and solve the country’s unemployment problem.
“With a better income, we can then work on our hospitals, schools and other social services,” he noted.
In 2014, global oil prices which were steadily over and above $100 a barrel through the recovery from the 2008 depression, dropped sharply to below $40 a barrel and have not recovered since.
The drop was attributed to among others to a slowdown in the expansion of the Chinese economy, as well as other large economies like Russia, India and Brazil.