OIL AND GAS MANAGEMENT FOR INCLUSIVE AND SUSTAINABLE DEVELOPMENT: AN EAST AFRICAN REGIONAL FORUM PROCEEDINGS REPORT ORGANIZED BY Economic Policy Research Centre I Kenya Institute for Public Policy Research and Analysis I Brookings Africa Growth Initiative KAMPALA, UGANDA I JANUARY 23–24, 2013 The KENYA INSTITUTE for PUBLIC POLICY RESEARCH and ANALYSIS Acknowledgments This forum and report were made possible because of the generous support of the John D. and Catherine T. MacArthur Foundation. The organizers are also grateful for the financial support of the African Capacity Building Foundation, the Think Tank Initiative of the International Development Research Centre and the Government of Uganda. We also extend our appreciation to the minister of finance, the minister of energy and mineral development, and the ambassador of the Royal Norwegian Embassy in Kampala for officiating the forum. We are also indebted to all delegates from civil society organizations, the private sector, the media, and the cultural and opinion leaders from the Albertine and Turkana regions, who participated and brought their wealth of expertise, without which the deliberations reported herein would not have been possible. Finally, we thank our partners in South Sudan and, in particular, the Centre for Strategic Analyses and Research. The Brookings Institution is a private non-profit organization. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclusions and recommendations of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its management, or its other scholars. Brookings recognizes that the value it provides is in its absolute commitment to quality, independence and impact. Activities supported by its donors reflect this commitment and the analysis and recommendations are not determined or influenced by any donation. CONTENTS ACKNOWLEDGMENTS ........................................1 2.1.8 Session III: Revenue Management to Maximize Benefits and Minimize Risks ...................... 12 ACRONYMS .......................................................4 Discussions following from the Session ................ 13 1. INTRODUCTION .............................................5 DAY 2 .............................................................................. 13 2.1.9 Session IV: Regional Approach to Infrastructure 1.1 A Background ............................................................ 5 and the Environment .................................................. 13 1.2 The Forum .................................................................. 5 Discussions following from the Session ................ 14 2.1.10 Session V: Natural Resource 1.3 The Forum Proceedings ........................................... 6 Management and the Private Sector .......................... 15 1.3.1 Purpose, Objectives and Outputs ........................ 6 Discussions following from the Session ................ 15 1.3.2 Forum Content, Format and Facilitation .............. 6 2.1.11 Session VI: Leveraging Media and Civil Society for East Africa’s Oil and Gas Development ................ 15 2. A SUMMARY OF THE FORUM PROCEEDINGS ....7 Discussions following from the Session ................ 16 2.1 Opening Remarks ...................................................... 7 2.1.12 Session VII: Breakout Sessions ...................... 16 2.1.1 Remarks by Dr. Sarah Ssewanyana, Executive Director, Economic Policy Research Centre, Uganda ...... 7 3. FORUM OUTPUTS ........................................18 2.1.2 Remarks by Professor Mwangi S. Kimenyi, 3.1 Priority Issues Raised ............................................. 18 Senior Fellow and Director, Africa Growth Initiative, Brookings Institution ..................................................... 7 4. THE CLOSING SESSION ................................19 2.1.3 Remarks by Hon. Peter Lokeris, Minister of State for Mineral Development, Ministry for Energy and 4.1 Closing Remarks by Hon. Peter Lokeris, Mineral Development, Uganda ..................................... 7 Minister of State for Mineral Development, 2.1.4 Remarks by Hon. Mary Jervase Yak, Ministry for Energy and Mineral Deputy Minister of Finance and Economic Planning, Development, Uganda ................................................... 19 South Sudan ................................................................. 8 4.2 Closing Remarks by the Royal Norwegian 2.1.5 Opening Address by Hon. Maria Kiwanuka, Ambassador to Uganda, H.E. Thorbjørn Minister of Finance, Planning and Economic Gaustadsæther .............................................................. 19 Development, Uganda .................................................. 9 2.1.6 Session I: Key Themes in Natural Resource ANNEX 1: FORUM PROGRAM ............................20 Management ................................................................ 9 2.1.7 Session II: Experiences in Natural Resource ANNEX 2: LIST OF FORUM PARTICIPANTS .........23 Management in Africa ................................................. 10 Discussions following from the Session ................ 11 ACRONYMS AGI Africa Growth Initiative EIA Environmental impact assessment EPRC Economic Policy Research Centre C-SAR Centre for Strategic Analyses and Research GoK Government of Kenya GoSS Government of South Sudan GoU Government of Uganda KIPPRA Kenya Institute for Public Policy Research and Analysis LAPSSET Lamu Port and Lamu-Southern Sudan–Ethiopia Transport Corridor MEMD Ministry of Energy and Mineral Development MOFPED Ministry of Finance, Planning and Economic Development PEPD Petroleum Exploration and Production Department 4 Oil and Gas Management for Inclusive and Sustainable Development: An East African Regional Forum 1. INTRODUCTION 1.1 A BACKGROUND Recent discoveries of commercially viable deposits of oil and gas in Uganda and Kenya, as well as ongoing efforts THE MESSAGE OF POSITIVITY SHOULD to improve and make oil production in South Sudan more BE TAKEN OUT TO THE STREETS THAT WITH efficient, have brought to the fore the need to revisit national COOPERATION, THE BLACK GOLD UNDER THE policies for the exploration and exploitation of oil and gas GROUND CAN BE TRANSFORMED INTO GREEN reserves and the allocation of the revenues obtained from GOLD ABOVE THE GROUND.” such activities. Informed discussions based on research and evidence on how best to efficiently and effectively manage Hon. Maria Kiwanuka, minster of finance, planning and East Africa’s natural resources are of critical importance at economic development, Uganda, on transforming oil this stage of the development of these resources. wealth into agricultural wealth Thus, in order to deliberate on and critically explore these issues, leading policy think tanks in East Africa—the Economic Policy Research Centre (EPRC), Uganda; 1.2 THE FORUM Kenya Institute for Public Policy and Analysis (KIPPRA); The forum—hosted by the EPRC, and jointly organized with and Centre for Strategic Analyses and Research (C-SAR), KIPPRA, C-SAR and AGI—was held on January 23 and 24, South Sudan—in collaboration with the Africa Growth 2013, at the Kampala Serena Hotel. The forum was attended Initiative (AGI) at the Brookings Institution, Washington, by delegates from Uganda, Kenya, Tanzania, Burundi, D.C., organized the two-day Forum on the Management Rwanda, South Sudan and the United States (see Annex of Oil and Gas Resources for Inclusive and Sustainable 2: List of Participants). Specifically, the attendees included Development in Africa. The forum brought together 114 senior government officials (ministers and deputy ministers, delegates from the East Africa region to deliberate on how directors and heads of commissions, and other high-ranking to efficiently manage their oil and gas reserves. government employees); local community leaders, including The delegates engaged in rigorous debate about the representatives of traditional rulers; entrepreneurs; and exploration and exploitation of oil and gas, the efficient representatives from civil society, think tanks, the media, and equitable management of oil revenues and the the diplomatic corps and the general public. The forum management of the environment. Their particular focus participants deliberated freely on various gas- and oil-related was on how regional cooperation can enhance the issues and paid particular attention to how the East African efficient utilization of the region’s resources. In addition to countries can more effectively manage their newly discovered sharing their experiences about managing an oil-based oil and gas resources so as to support economic and human economy, they emphasized the importance of openness development in the region and avoid the resource curse that and transparency in the design and implementation of has so frequently characterized many natural-resource-rich policies for the management of this nascent sector. African countries. The Brookings Institution ❘ Africa Growth Initiative 5 1.3 THE FORUM PROCEEDINGS the importance of making certain that citizens of the 1.3.1 Purpose, Objectives and Outputs communities where the gas and oil reserves are located are granted the facilities to participate fully and effectively The regional forum, whose theme was oil and gas in the design and implementation of policies for the management for inclusive and sustainable development management of these resources. in Africa, was