We are experiencing something not seen in over 10 yrs. Uganda is going through the Oil fever. Do you have any idea how many new Oil discovered countries will suffer? Your economies of scale are virtually non existent. You are facing a new world now where the oil producers have mastered their costs and reduced them immensely. Those of you who read my article on BPOs might have an idea.
I have repeatedly told people ” no refinery, no pipeline, no oil money for Uganda”. Do not let anyone fool you on this one. One or the other or both. Then we have this over supply of oil on the market. Do you really think USA is interested in Uganda to steal your oil? Social Media from Uganda keeps saying this and I always ask them if they know how much oil USA and Canada has. The funny thing is the biggest drillers of oil in Canada are USA so we would just give them the keys to come here and take it all. So Uganda with bad roads, no national airline seriously believes that USA wants its oil? Sometimes you have to ask God why you were born in Uganda.
The big news this week is the fact that sanctions on Iran have been lifted. This means they can now pump their oil onto the global market. You need to know that they have very big reserves and they will push the oil onto the market super fast. Iran is not in OPEC. Given the volume of supply on the market now before this week, can you imagine what 600,000 – 700,000 extra barrels daily will do to the pricing?
I have been confronted by some Ugandans who say OPEC can cut off production and help raise the price of oil. Wrong thinking. OPEC does not control the global pricing of oil anymore. Below are the OPEC countries.
The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).
From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership in January 2009, but this was reactivated from 1st January 2016.
This means that, currently, the Organization has a total of 13 Member Countries.
Source: OPEC website
THE TEN BIGGEST OIL EXPORTERS:
Below are the 15 countries that exported the highest dollar value worth of crude oil during 2014:
- Saudi Arabia: US$268.2 billion (18.5% of total crude oil exports)
- Russia: $152.6 billion (10.5%)
- United Arab Emirates: $98 billion (6.8%)
- Canada: $88.1 billion (6.1%)
- Iraq: $84.4 billion (5.8%)
- Nigeria: $76.2 billion (5.3%)
- Kuwait: $69.3 billion (4.8%)
- Angola: $61.2 billion (4.2%)
- Kazakhstan: $53.6 billion (3.7%)
- Venezuela: $53.3 billion (3.7%)
- Norway: $44.2 billion (3%)
- Iran: $41.3 billion (2.8%)
- Mexico: $36.2 billion (2.5%)
- Oman: $34.8 billion (2.4%)
- United Kingdom: $29 billion (2%)
So you notice how the biggest exporters of oil are not in OPEC? Iran just got its license to export. USA and Canada have far too much oil you have no idea and both countries have over the last 5yrs developed economics of scale so oil is no longer the issue. Stability and human rights. Uganda makes a very big mistake to think they can abuse human rights and expect the West to fly in and negotiate on oil. Did you ever see a USA company in your oil business? Heritage Oil is Canadian and they took off some years ago. If you keep abusing human rights, Tullow and Total might do the same. We are living in a global village and everything you do will be shown to the world. I will soon write about Social Investing. This is the new thing. You can shut down all your investments if you find out that you are investing in a company or country that does not respect basic human rights. Ask Barrick Gold and how they made out in Tanzania.
UGANDA POLICY MAKERS MUST STOP BANKING ON OIL. You are setting up the country for an imminent collapse which happens to be in progress anyway!
Martha Leah Nangalama
Martha Leah Nangalama works in IT for an Oil company. She can be reached via email directly. You can read her daily column on the Ugandan shilling, oil and global markets Monday to Friday at The Insider.