Uganda’s discovery and development of oil resources in the Albertine Graben present a rare opportunity for economic transformation.
The oil and gas sector has the potential to drive growth, invest in infrastructure, healthcare, education, and other vital sectors.
However, this promise could be undermined by unaddressed strategic risks, hence the need for strategic risk management if the sector is to operate sustainably.
Importance of Strategic Risk Management
According to Mr. Edmond Kansiime, the Manager Strategy at the Petroleum Authority of Uganda (PAU), a comprehensive, government-wide adoption of strategic risk management is crucial for building resilience across public sector operations.
Kansiime notes that this involves identifying, assessing, and mitigating risks that could impact the country’s economic transformation.
Current Risk Management Efforts
Currently, Kansiime says Uganda’s risk management efforts have focused mainly on financial risks and disaster response.
However, he observes that this approach overlooks broader risks in service delivery, which could have a significant impact on the country’s economic transformation.
Strategic Risks in Oil and Gas
The oil and gas sector is inherently complex and fraught with risks.
Some of the strategic risks that Uganda needs to address include:
Regulatory Risks
These include changes in regulations or laws that could impact the oil and gas sector’s operations and profitability.
Operational Risks
Accidents, equipment failures, and other operational issues could disrupt production and impact the environment hence there’s need to insulate the sector against them.
Environmental Risks
Oil spills from the pipeline, gas leaks, and other environmental incidents could harm local communities and ecosystems.
Reputation Risks
Negative publicity or perceptions about the oil and gas sector could also impact Uganda’s reputation and attractiveness to investors.
Building Resilience through Strategic Risk Management
To build resilience across public sector operations, Uganda needs to adopt a comprehensive approach to strategic risk management. This involves:
Identifying Risks
Identifying potential risks and assessing their likelihood and impact.
Assessing Risks
Evaluating the potential consequences of each risk and prioritising mitigation efforts.
Mitigating Risks
There is a need to develop and implement strategies to mitigate or manage risks.
Monitoring and Review
The government and all stakeholders in the sector must continuously monitor and review risk management strategies to ensure their effectiveness.
Managing strategic risks in oil and gas is crucial for Uganda’s economic transformation. By adopting a comprehensive approach to strategic risk management, Uganda can build resilience across public sector operations and ensure that the oil and gas sector contributes to sustainable economic growth and development.