Congo, Ugandan leaders boost oil, security ties

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Congo and Uganda have agreed to upgrade diplomatic relations and boost cooperation on security and oil exploration, the former enemies who share a border in one of Africa’s most risky business regions, said yesterday.
Reuters reports the two countries’ presidents held talks on their shared border on Wednesday, highlighting improved relations after two wars over the last 15 years, during which Ugandan forces backed Congolese rebels and were accused of looting resources.
Late last year, Congo’s President Joseph Kabila allowed his Ugandan counterpart Yoweri Museveni to send his soldiers into Congo to hunt Ugandan Lord’s Resistance Army (LRA) rebels.
New finds on the Ugandan side of Lake Albert by Heritage Oil Plc and Tullow oil appear to have accelerated cooperation and eased tension over the demarcation of the border running through the lake which previously caused armed clashes.
“The two leaders agreed to strengthen further the relations between Uganda and (Congo), as well as the area of security, oil and gas exploration,” said a joint statement issued by Uganda.
Uganda said late last month that it expected to have in excess of 1 billion barrels of oil on its side of the lake and oil production would start in late 2010 or in early 2011.
Tullow and Heritage have said their finds make operations commercially viable. Analyst estimates for reserves touch 2 billion barrels and will rise, with exploration continuing and Uganda due to lift a licensing freeze by the end of the year.
Oil exploration on the Congolese side is far behind, with Tullow still in talks with the government over a disputed block. The collapse of Congo’s mining revenues has increased the urgency of finding other sources of government income.
Analysts say the aim of the companies operating in the region is to establish operations on both sides of the lake and pump oil out by pipeline through Kenya.
“Commercially, it may make most sense to harmonise players,” said Philippe de Pontet, Africa analyst at Eurasia Group.
Given the history of natural resource exploitation in Congo, the prospect of Congo’s oil passing through Uganda is sensitive and has sparked warnings of monopolies or Anglo-Saxon hegemony.
Insecurity, an oilfield lying under a contested border and, in Congo, one of the toughest business environments in Africa, mean risks remain high for companies looking to operate there. 
“There are all sorts of potential spoilers … While oil was at $150 (per barrel) people may not have worried but it is (now) a tough sell,” de Pontet said.
Allegations over corruption in the distribution of blocks in Congo has also fuelled uncertainty.
But after Kabila invited both Uganda and Rwanda, also a former occupying force, back into his country to hunt to their rebels, regional dynamics appeared to be shifting.
“There will be negative sentiment but I don’t think it will be enough to stop Kabila. (Congo’s oil) has to take the quickest route. That suggests that Congo-Uganda cooperation is necessary for Congo to become commercial,” de Pontet said.
The talks were the presidents’ first face-to-face meeting on home turf since the end of the last war in 2003.
Accompanied by his foreign, defence and oil ministers, Kabila inspected an honour guard and received a 21-gun salute in the western Ugandan border town of Mpondwe before being escorted back to Congo on foot by Museveni, the statement said.
The countries’ diplomatic missions will be upgraded to ambassadorial level within a month, it added.