East African Business Week

Kampala, Uganda- Uganda has discovered commercial quantity of oil and gas, a scenario that has raised high expectations.
Many people are expecting jobs, drop in the volatile pump prices and infrastructural development. Some expect money and improved standards of living as in the case with countries such as Norway and Indonesia.
A story is told of a Primary School teacher in one of the oil exploration areas who, during a visit to an oil well in preparation for a public hearing, carried a 20 litre jerry can with the hope of coming back with oil.
It was when she found zipped wells with stoppers that it dawned on her that oil is very far away and it will take a protracted process.
According to Jimmy Kiberu, the Tullow Uganda Corporate Affairs Manager, the first oil will require field developments where diverse oil fields will be interconnected by pipelines that will collect the crude into a central collection hub.
Also a refinery will be needed to process the crude oil to meet the local, East Africa and some parts of the Democratic Republic of Congo (DRC) market.
Furthermore, about 1,300 km pipeline to Mombasa port will be required to export the crude to international markets   
The high expectations come at a time when Uganda has discovered 2.5 billion barrels of commercial oil in reserves.
But Reuben Kashambuzi, the Chief Technical Advisor in the Ministry of Energy and Mineral Development, contends that 'oil will only be cheaper than what it is now because you will have removed the transport costs'.
"My honest opinion is that energy is not cheap. You must not give the people the feeling that you are just going to give them free energy," he says.
"When I went to Norway, i found that fuel is so expensive. You can't believe that that is a country, which produces 4 million barrels per day. So I asked the host that this is crazy. Your price is even higher than that in Uganda, and yet we import everything."
Tullow Oil, Uganda's lead operator in the oil exploration says commercial oil production is expected to start in late 2012.
With production in place, the emerging sector is anticipated to create some 10,000 jobs at the minimum.
"Uganda is a remote location in that the industry has not been developed enough. The big challenge is to get the skilled labour" says Kiberu.
Depending on what plan Government, Tullow and its partners China National Offshore Oil Corporation (CNOOC) will adopt, and any additional resources discovered in the upcoming drilling campaign, Uganda is targeting production of 200,000 barrels of oil per day (bopd).
Uganda's Ministry of Energy and Mineral Development undertook a feasibility study to find out what kind of refinery will meet the market needs.
The study considered equipments needed, location, market, and financing options.
 "We have done a study in 2008 and we found that the market in the region was 120,000 barrels per day and growing at 5% per year," says Robert Kasande, the assistant Commissioner Geology, at the Ministry of Energy and Mineral Development.
Government is considering setting up a refinery, which will start with a production capacity of 20,000 barrels of oil per day and will progress to 60,000 barrels and subsequently go up to 150,000 and 200,000 barrels per day.
The proposed refinery will be located in Kabale, Hoima in western Uganda adjacent to the oil exploration wells.  Ministry officials say the refinery expected to be in place by 2015, will initially produce 20,000 barrels per day.
In 2008, Uganda government approved the National Oil and Gas Policy.
The policy provides guidelines to the development of Uganda's emerging oil and gas industry following the discovery of commercial prospects.  
In his inaugural speech, President Museveni said in the next three years, Uganda will be using her own fuel after the building of the refinery is finished.