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Article

6 Nov 2013

Author:
Jeff Mbanga, The Observer (Uganda)

Tullow Oil’s Kenya problems mirror wider regional hiccup

Tullow Oil’s suspension of operations in northern Kenya, after locals protested...might seem like a small rough patch on the glossy oil story that Kenya has tried to sell to investors. But underneath it is a bigger regional problem, one that Uganda’s oil industry will very likely meet when construction of the crude export pipeline begins...The much more difficult question is where to find the land, appeasing the interests of local residents, and ultimately finding the funds to build the pipeline – issues that Uganda remains very unclear about...[O]il companies operating in the region will look to the countries to deal with any public uprisings that could delay East Africa’s oil prospects...Questions over land are quite sticky, especially if you consider the kind of pressure Uganda faces to compensate the people living around the refinery...Because of compensation, a cassava tuber in the Albertine graben is now very expensive. The government valuer is in trouble. A mud house in Kabaale has become more expensive than in Kampala or equivalent. [also refers to Toyota Tsusho, CNOOC, Total E&P & Africa Oil]