Energy ministry Irene Muloni has expressed the government’s wish to join the Organisation of the Petroleum Exporting Countries as a full member so Uganda can tap into benefits like the stabilisation of crude oil prices.
While presenting at the 173rd OPEC Meeting in Vienna on Friday, Ms Muloni said Uganda had a lot to take away from the 24-member cartel of oil-producing countries. Uganda is preparing to start commercial oil production in three years’ time.
“OPEC was conceived at such a critical time of transition in the international economic and political landscape,” Ms Muloni told the meeting. “This was a time characterized by extensive decolonization and the birth of many newly independent states in the developing world.”
OPEC’s 24 members accounted for 44% of global oil production and 73% of the world’s “proven” oil reserves as of 2016, underlying the cartel enormous influence on global oil prices that were previously determined by American-dominated multinational oil companies.
The cartel’s formation in 1960 was heralded as a turning point in the oil industry, with the countries moving towards national sovereignty over their natural resources. OPEC’s decisions have since been critical both in the oil market and international market.
Some of OPEC’s African members include Angola, Equatorial Guinea, Algeria, Nigeria, and Libya.
The Uganda government says commercial oil production will start towards the end of 2020 after the construction of the proposed crude oil export pipeline from Hoima to Tanga port in Tanzania. The 1,44km pipeline will transport an estimated 400,000 barrels of oil per day.
The meeting in Vienna ended with a resolution to extend the OPEC production cuts for an additional nine months from January to December next year. The reduction in production has been credited for pushing up oil prices, with Brent crude currently trading at $58 per barrel, its highest level since July 2015. OPEC seeks to further reduce global stockpiles of crude oil and therefore push up prices above $60 a barrel.