Uganda: What an Oil Alliance Can Do for a Country With No Oil Production

3 MINS READSep 28, 2017 | 20:40 GMT

As globally inconsequential as it may seem for countries that produce small amounts of oil to join the Organization of Petroleum Exporting Countries (OPEC) — in which their production levels are dwarfed by Iran, Iraq and Saudi Arabia — the move can significantly amplify the influence of these small nations. On Sept. 27, Ugandan Energy Minister Irene Muloni announced that her country will join the bloc after Uganda starts producing oil commercially in 2020. Equatorial Guinea, another small-scale African producer, joined the bloc earlier this year. Though Uganda currently produces no oil whatsoever, the landlocked African country recently began developing an estimated 6.5 billion barrels in recently discovered oil reserves — about a quarter of which is recoverable — and aims to eventually produce as much as 200,000-250,000 barrels per day, although actual production levels are likely to fall short of that target.

For small states, OPEC can be a forum to amplify their influence on a regional, or even global, stage. In Uganda, for example, joining a group like OPEC is central to the country's geopolitical strategy under President Yoweri Museveni. Museveni has long tried to use international blocs and involvement in regional activities to increase his country's stature and to prevent it from being hidden behind its much larger neighbor, Kenya. These efforts include working with the African Union Mission in Somalia, the Intergovernmental Authority on Development and the African Union — which Museveni may be eyeing for his post-presidency career.

Even if Uganda reaches its production goals, Saudi Arabia will still produce 40 times as much oil. But smaller countries like Equatorial Guinea, Gabon and (potentially) Uganda get important benefits from joining the group. (Equatorial Guinea has also reportedly also asked Cameroon and South Sudan to consider joining.) Although OPEC is primarily known for organizing production cuts and responding to market conditions, it has research capabilities which smaller countries cannot match on their own.

It is far easier for smaller countries to become closely involved with OPEC than with organizations like the International Energy Agency, which is often driven by countries in the Organization for Economic Cooperation and Development. Joining OPEC enables these smaller countries to be more informed than they would be on their own. As well, the small African producers are not small when viewed as a bloc. Even without the contributions of large sub-Saharan African OPEC members such as Nigeria and Angola, Gabon, Cameroon, Ghana, South Sudan, Equatorial Guinea, the Republic of Congo and Chad collectively produce over 1 billion barrels per day

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