UGANDA: Lawmakers voted on October 12 to ask the government to delay completion of British explorer Tullow Oil's sale of stakes in local interests to develop oilfields until the country has all necessary oil laws in place

Record ID: 343793

  • Title: UGANDA: Lawmakers voted on October 12 to ask the government to delay completion of British explorer Tullow Oil's sale of stakes in local interests to develop oilfields until the country has all necessary oil laws in place
  • Date: 12th October 2011
  • Summary: LAKE ALBERT, UGANDA (FILE) (ORIGINALLY 4:3) (REUTERS) VARIOUS OF OIL EXPLORATION BY TULLOW NEAR LAKE ALBERT IN WESTERN UGANDA
  • Embargoed: 27th October 2011 13:00
  • Keywords:
  • Location: Uganda, Uganda
  • Country: Uganda
  • Topics: Politics,Energy
  • Reuters ID: LVAC2FB7TCHLXMY9ZTX20PMGHJEQ
  • Story Text: Uganda's parliament voted on Tuesday (October 11) to ask the government to delay completion of British explorer Tullow Oil's sale of stakes in local interests to develop oilfields until the country has all necessary oil laws in place.
    Last year, Tullow agreed to sell stakes in its Ugandan assets to Chinese group CNOOC and French oil company Total for 2.9 billion US dollars.
    The company has been awaiting final government approval for the partnership which is expected to unlock a 10 billion US dollar investment developing the oil sector into production phase.
    But after a heated debate in parliament following claims that government ministers took multi-million dollar bribes from Tullow, the sale was temporarily stopped.
    Leading opposition to the sale was MP Gerald Karuhanga who said in parliament on Monday (October 10) that the UK based energy firm Tullow Oil paid bribes to high level members of the Ugandan government in order to influence decisions.
    Tullow has rejected the allegations calling them "wholly defamatory".
    Members of parliament who support the delay said the move was a temporary means to make sure the proper procedures are in place before further deals are stuck.
    "There are new undertakings under PSA (Production Sharing Agreement) two between now Tulow, CNOOC and Total, we are saying halt that," said MP Theodore Sekikubo at the debate.
    Speaker Rebecca Kadaga then put it to the vote by acclamation and it was approved.
    Uganda discovered hydrocarbon deposits along its border with the Democratic Republic of Congo in 2006 and production was expected to commence early next year.
    Parliament also voted on Tuesday for a moratorium on all new petroleum deals until a new law has been enacted.
    Parliamentary resolutions are non binding to the executive branch of the government, but Tuesday's vote was a sign of the growing frustration among lawmakers from both opposition and ruling parties over delays to the development of 2 billion barrels of oil reserves.
    However Angelo Izama, political analyst and director for Fana Kwawote, an energy think-tank, said the vote was a wake up call to the government.
    "One of the leaders of this oil companies once mentioned to me that Uganda is a good place to do business because you only have to answer to one person and that is the president, that is the general attitude that defines the way companies approach business, so the involvement of parliament is to insist that actions that used to be taken by a small group now have to be taken by a wider group and that public institutions must enter at this stage of the oil industry," he said.
    He added that the government may chose to ignore non-legally binding resolution but if they do they risk snubbing a significant proportion of the political establishment.
    Uganda is in another tax dispute with London-listed Heritage Oil over 405 million US dollars of capital gains tax. Arbitration to settle that row is under way in London.
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