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Tuesday, July 15, 2014

One Little Step Into the World of Oil

Imagine this: A biochemical process forms hydrocarbons, in reserves that are proven or unproven, and in types that are sweet and light or heavy and sour. Then find out the commercial viability of such reserves and measure the output in barrels per day. Now imagine gas floating on oil. Someone tells you that the transformation of these resources into industrial and consumable products takes place through upstream, midstream or downstream activities.

The above makes little sense to some outside "the business," including many citizens in countries where oil, gas and minerals have recently been discovered. But the complex and nuanced issues surrounding the oil and gas sector—from the geology to exploration, extraction and, the most crucial stage of all, commercial development—become clearer with a little help.

The Natural Resource Governance Institute (NRGI) offered to decode for us this complicated industry, and so I took my first little baby steps into the world of oil and gas. Joining 28 other journalists from Ghana, Uganda and Tanzania, I received instruction by five veteran journalists and a host of guest speakers from civil society and the industry. Organized by NRGI and hosted by the African Centre for Media Excellence, the training was engaging and offered a much-needed mentoring opportunity, which we lack in our newsrooms. Partly funded by STAR-Ghana, NRGI's program for strengthening media oversight of the extractive actors in Africa is run with local partners Penplusbytes in Ghana and Journalists' Environmental Association of Tanzania.

Like many Ugandans, on day one, I believed that oil companies were out to cheat us and that government had given away so much of its take in the hope of attracting investment in the sector that, as a result, we would not get a sausage from it.

But the course was about issues, not perceptions. Beyond the basics of the oil, gas and mining sectors, it taught me that good governance matters. Ghana, for instance, fast-tracked oil production, only to realize later that it lacked some of the essential laws and regulations that should have been in place to begin with. Uganda, on the other hand, is still dragging its feet on many issues, and the industry players are agitated because of the snail's pace toward production.

Both countries are on the path to becoming significant oil producers in the next 10 years, but Ghana is galloping ahead in terms of output. Meanwhile, Tanzania, with an estimated 46.5 trillion cubic feet of natural gas reserves that are expected to quadruple in the next few years, is already a hot spot on the world's energy map, courting major companies such as Norway's state-owned Statoil, Britain's BG and Ophir Energy, and USA's ExxonMobil. Players in Ghana and Uganda, by contrast, are relatively smaller and more likely to take risks.

As a journalist, how do I deal with such information, and how do I present it in my story? This is where the demanding training comes in.

A field trip to the Albertine Graben in western Uganda offered a critical look at oil's impact on communities, flavored with rib-cracking tales of how locals are spending millions of shillings paid to them as compensation—from marrying more women to being duped into buying second-hand cars at double the price. Yet others are tapping into this new opportunity and upgrading their skills, like farmers in Hoima who are supported byTraidlinks to raise the quality of their produce so that they can supply foodstuffs that meet the oil industry's catering standards.

The discoveries of oil in Uganda and Ghana and gas in Tanzania have raised questions about whether these countries can escape the "resource curse," where treasured resources breed despotism, conflict and corruption instead of development. Civil society actors have clamored for better laws to manage oil and gas revenues in these countries, and to improve oversight within the sector. The governments in Ghana, Uganda and Tanzania have each said they are working on it.

So how do I hold these governments accountable?

TEMA! That was the famous acronym we learned from George Lugalambi of NRGI, who said that natural resource decisions should be built on three good foundations: transparency, effective management, and accountability, or TEMA—which happens to be the name of a port town on the outskirts of Accra, where Ghana's oil refinery is located. The message was reinforced by Kwami Ahiabenu of Penplusbytes, who drummed the need to understand the economic and fiscal conditions relevant to each country. "How do you follow the money?" he asked.

So at the end of the 10 days, I had learned that I must do more than just demand a percentage of the royalties; I must also understand how revenue management and fiscal rules can benefit current and future generations. Most importantly, I need to help my readers take steps—little or big—to do the same. And now I'm equipped to do just that.

Barbara Among is a freelance journalist in Uganda. Her work frequently appears in The EastAfrican, among other news outlets.

To learn more about NRGI's course "Strengthening Media's Oversight of the Extractives Sector," or to read the experiences of other participants, please visit our course alumni page at www.resourcegovernance.org/news/strengthening-media-oversight-extractive-sectors-2014-class-profiles