Oil in Zambia? An early Birthday gift for the Nation?
Middle East, the world’s oil field has been turned into a geopolitical battle field. Policy makers in Zambia recently announced the exploration of oil and gas in Zambia and citizens hope this results in industrialisation rather than conflict. What are the prospects of an oil and gas industry in Zambia? When some citizens were asked whether there is oil or gas in Zambia, some stated that there is no oil, a few stated that there were some traces of it in very small amounts. The objective of this essay is to show the prospects of oil and gas in Zambia, and how Zambia benefit. This essay will argue that with proper policies in place, Zambian economy can be industrialised by investing in oil and gas, it provides an outline on how to develop such policies.
An oil and gas industry presents an opportunity for Zambia to industrialise its energy sector. Reuters reported earlier this year that the Zambian Government is seeking to further diversify its economy rather than simply depending on its major resource copper, it is doing so by allowing the British oil company Tullow to explore the northern and Luapula provinces of Zambia for oil and gas (2018). After some tests, the soil was found with good traces of oil worth further exploration. Zambian Minster of Commerce, Trade and Industry; Honourable Christopher Yaluma further stated at the Common wealth meeting that since Tullow announced its investment in Zambia, more companies are taking interest in Zambia’s energy sector (Lusaka Times, 2018). Every company carries out intense feasibility studies and assessments before it embarks on a project. Tullow is exploring a 52,937km block, operating with 97.5% interest where it carried out a 20,000 sq. km radiometry gravity survey and passive seismic survey (Tullow, n.d.). Although findings have not yet been publicly shared, there must then be a high probability of finding oil and gas in Zambia worth mining. It is evident that Zambia is neighbours the regional oil producer, Angola. Zambia itself is the second largest Copper producing country in the world. Copper is a diminishing resource and it has become evident to the leaders of the country that Copper will not last forever. Therefore it is paramount that policy makers in Zambia design policies that will shape the future of an industrialised energy sector in Zambia.
Public Financial Management will provide proper oil and gas management. Oil and Gas are objects of controversy and conflict world wide. We have seen how the Middle East, has been plunged in wars for decades with one factor being the control of oil producing regions. It would be a shame to see Zambia fall victim of the ongoing geopolitical conflicts. One way to prevent this is by careful public financial management in the energy sector. According to the Public Financial Management Handbook (2018), “The focus of public financial management is the effective provision of services to citizens and optimum use of public resources.” It is therefore the duty of the government to safe guard the prospect of an oil and gas industry in Zambia by being transparent about any trade agreements. It is evident from oil producing counties like Nigeria that proper management of the oil and gas industry can lead to rapid industrialising and improve standards of living for citizens, for the past 54 its has been the Zambia dream to achieve development in all sectors, oil and gas present a rare opportunity for this dream to be realised if proper public financial management is taken.
The companies that will be mining the oil and gas will have to implore community engagement in order to have the backing of the public whilst they use state of the art technologies and the latest scientific findings (Jagerroos & Krause, 2016). This should be done in order to protect the environment while they are exploring and mining oil and gas in Zambia. Zambia has diverse species of plants and abundant wildlife that co-exist in sybyoionic system sustained in the environment. Special care needs to be taken as these companies explore the oil to ensure that they maintain the environment because Zambia’s economy benefits from its tourism sector. This calls for intensive planning to prevent negative outcomes of oil mining i.e. disposing of waste into river, CFC emissions, destruction of plant life etc. (Jagerroos & Krause, 2016). Once again the government is tasked to pay close attention to all developments in this venture and not turn an eye away even to blink to ensure that it is fulfilling its promises to the citizens of Zambia. If more companies are to invest in the energy sector that means that more care needs to be taken.
By focusing on demand governance investment in the energy sector will have a ripple effect on all the other sectors of the economy. With energy demands being met, we hope to see increased GDP and job creation. Current world trends in the energy sector are for sustainable energy transition i.e. decarbonisation (Kuzemko, Mitchell, Lockwood & Hoggert, 2017). This calls for the use more advanced technology in the energy sector, another way of looking at it is by also investing in renewable energy. Renewable energy can be simply defined as energy that is generated from a resource that does not diminish, oil and gas are diminishing resources and cannot be defined as renewable energy. Hydroelectric power, solar energy, tidal power and bio-energy are classified as renewable energy because they are produced from sources that are not diminishing. Today oil and gas are the dominant sources of energy but renewable energy is quickly catching up. At the moment Zambia’s energy sector is run by renewable energy. Tullow has told us that oil and gas exploration is schedules to take about 2-10 years, development 3-10 years and production 20-50 years (Reuters,2018). With the prospectus of oil and gas, the government has been presented with a rare opportunity of rapid industrialisation that is sure to benefit all sectors if tight measures are put in place. The government must implore demand governance whereby it clearly outlines the long-term strategies it will be using to ensure regulatory policies are both created and adapted to oversee the entire oil and gas venture (Kuzemko et al,2017).
In addition, the public should be informed about how energy will be distributed. It can be observed from recent studies that demand side reduction is an effective way of curbing energy insecurity, this calls for the private sector to play an important role in developing small and medium enterprises as well as large corporations that invest in indoor climate control, which has now become a bullet point in energy policies (Kuijer & Watson, 2017). This way the burden will be relived from the main power plants in Zambia and also open opportunities for private companies to benefit from the energy sector. Hampton also tells us that policy makers are looking into reducing energy usage in homes and work places as a strategy (2017). These policies are there to monitor and drive the projects in a direction that enables policy makers achieve their objectives.
The evidence presented argues that it is truly possible for policy makers to create policies that will transform Zambia’s energy sector and modernise the economy with it. This can be done by imploring strict public financial management, community engagement, demand governance and investing in demand side reduction. Policy makers should enable citizens to understand what is going on in the energy sector and also outline how income can be generated. The policy makers must ensure that all profits are used to industrialise the energy sector and other sectors. The prospects of an oil and gas industry should be welcomed with critical dialogue carefully outlining terms of agreement and monitoring policies that will oversee the entire programme with high regard for transparency. Speaking on behalf of those who share my point of view, we as Zambian people would like to see progress.
References:
Hampton, S. (2017). An ethnography of energy demand and working from home: Exploring the affective dimensions of social practice in the United Kingdom. Energy Research & Social Science. 28, 1-10. Retrieved from www.elsevier.com/locate/erss
Jagerroos, S. and Krause, P. R. (2016). Rigs-To-Reef; Impact or Enhancement on Marine Biodiversity. Journal of Ecosystem & Ecography. 6, 1-9. doi:10.4172/21577625.1000187
Kuijer, L. and Watson, M. (2017). ‘That`s when we started using the living room’: Lessons from local history of domestic heating in the United Kingdom. Energy Research & Social Science. 28, 77-85. Retrieved from www.elsevier.com/locate/erss .
Kuzemko, C., Mitchell, C., Lockwood, M. And Hoggert, R. (2017). Policies, politics and demand side innovations: The untold story of Germany`s energy transition. Energy Research & Social Science. 28, 58-67. Doi: http://dx.doi.org/10.1016/j.erss.2017.03.013
More foreign oil companies expected to invest in Zambia. (2018, April 16). Lusaka Times. Retrieved from www.lusakatimes.com/2018/04/16/more-foreign-oil-companies-expected-to-invest-in-zambia/
Mfula, C. (2017, August 11). Britain`s Tullow launches oil, gas exploration in Zambia. Reutuers. Retrieved from www.reuters.com/article/zambia-oil-gas/britains-tullow-launches-oil-gas-exploration-in-zambia-idUSL5N1KX3AO
Oil and gas discovered in Zambia. (2006, October 23). Aljazerra. Retrieved from www.ajazerra.com/archive/2006/10/20084913811853723.html
Public Financial Management Handbook. (2017, October). In National Assembly of Zambia. Retrieved from www.parliament.gov.zm
Tullow. (n.d.). Retrieved from www.tullowoil.com/operations/new-ventures/zambia
