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Ugandan Government Denies Secret Oil Deals; Says Extraction to Begin Within Five Years


Uganda to begin oil exports in 3-5 years
Uganda to begin oil exports in 3-5 years

This is Part Three of a five-part series on Oil Contracts in Uganda
Continue to Parts: 1 / 2 / 3 / 4 / 5

Ugandans will have to wait 3-5 years for commercial oil production to begin, according to senior government official. The delay, said Bukenya Matovu, the spokesperson for Uganda’s ministry of Energy, is due to “some other things that have to be done in terms of [putting in place] infrastructure before production can start.”

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Output from the Ugandan fields, which hold an estimated 2.5 billion barrels of oil, is expected to reach more than 200,000 barrels of oil a day, according to Tallow Oil, the London-based company that signed oil production agreements (PSAs) with the government.

The oil production agreements signed in February, despite a resolution of Parliament halting such agreements until an enabling law was in place, fueled calls for public disclosure of oil production contracts and their revenue streams.

Matovu, however, dismissed accusations of lack of transparency in the oil deals and instead accused some parliamentarians of failure to read these agreements and explain their contents to their constituents.

“Once we have spoken to parliament we have spoken to the country, said Matovu, “these PSAs are in parliament. Parliamentarians have had them for almost two years; therefore they cannot claim ignorance of their existence.”

He said government doesn’t have a policy of secrecy [in regard to oil transactions] but added that these are business agreements that have areas that cannot be disclosed to the public. What is important, he added, is people to have trust in government to act on their behalf.

Matovu said even a court case filed against the government compelling it to release the details of the PSAs had been dismissed by court.

He said there are two oil bills currently before parliament giving the legislature a chance to add their input.

“Uganda has an environment management law,” he said, in reference to concerns that oil waste disposal and environmental issues were not adequately addressed in the oil contracts.

The law, he explained, states that no activity shall go on unless that activity is subjected to an environment impact assessment.

He advised those who think the current [environmental] law isn’t adequate to call for its revision to bring it in tandem with what is happening [in the oil sector].

In February, Tullow Oil, France's Total and China's CNOOC completed their long delayed $2.9 billion partnership venture that gave each of them a one third stake in Tullow's five Uganda exploration blocks.