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NAPE Lobby 39Th Edition-Modified.Indd April 2008 February 2012 39th Edition Dubious Oil Deals in Africa The Uganda oil industry is currently at the epicenter of corruption amidst efforts to introduce greater transparency in the manage- ment of the resource. Human factors in oil-related corruption is seen to play a bigger role in lifting the pending oil resource curse. Public demand for transparency and accountability is necessary, but not enough to solve the problem. Government officials named in corrupt practices must desist from the vice. To reduce the degree of severity of corrupt practices, genuine efforts must be made to assist people to recognize the negative significance of these human factors and work towards reducing them. The primary sources of political-corporate corruption is decay of transparency and accountability which lead to economic scandals and total national de-development. Oil and other natural resources are present across Africa. But how have the Africans benefited from the abandat resource? Editorial The Uganda oil industry started on a wrong footing. It is has exhibiting corrupt tendencies even before a drop of oil begins to flow. Bribery scandals involving millions of dollars and high profile government officials have stunned the country. News Uganda’s increasingly skeptical population fears that .....................................3 the oil wealth will not actually benefit the impoverished masses but a few in power and manifests a curse! .....................................6 The recent extraordinary events have been, to a great ............................8 degree, inspired by a collective sense of resentment at the mystery involving oil revenue sharing agreements .....................................10 hurriedly signed between Uganda government and Tullow Oil .....................................13 The local press, for some time now, has been reporting .....................................16 scandals in Uganda oil industry. (e.g. Daily Monitor, 2011 “Oil deals were signed without the knowledge of Contracts Authority”). 7 Press Clippings . Two government Ministers, and the Prime Minister, allegedly pocketed millions of petro dollars in bribes. Wide and sustained public outcry has not yielded spurred government to put accountability and transparency at the Special Report . core of oil decisions. Late last year Parliament, in service of public interest, ...................19 resolved to delay the sale of Ugandan assets until enabling oil laws are enacted. Parliament also instituted .....................................21 an investigation on the named officials to ascertain the .....................................23 truth. Ugandans were waiting to see if the efforts of the lawmakers would help to improve the development of the Commentary oil industry. In an unprecedented move and, in contempt of the parliamentary resolution, government signed two oil 9 agreements with Tullow Oil without the knowledge of lawmakers, and then tabled the draft oil bills a few days later. This is the most scandalous incident Uganda has Insight seen in the oil industry and in the history of legislation. Government said it did that to pre-empt actions by Parliament aimed at derailing the country’s oil industry. Government would deal with lawmakers and bodies who tried to do this. There now seems to be a general agreement that money must have changed hands. Some experts say such scandals are the inevitable result of competition among the various oil companies looking for favors over others. The Italian firm ENI is said to have won no contract with the government but it made news for its willingness to give incentives to Ugandan officials in exchange for a deal. 8 Gender In this issue, NAPE Lobby explorers how lack of transparency and accountability in the oil sector is undermining the doctrine of public trust and possible improvement of Ugandans livelihoods. EDITORIAL BOARD Frank Muramuzi Chairman A Publication of the National Association Betty Obbo Secretary of Professional Environmentalists (NAPE) Geoffrey Kamese Member P. O. Box 29909 Kampala, Uganda Phone: +256 - 414 - 534453 Franklin Mushabe Member Fax: + 256 - 414 - 530181 Oweyegha-Afunaduula Member E-mail: [email protected] Dennis Tabaro Member http://www.nape.or.ug News... Governance: Dubious deals in Uganda’s oil industry By Oweyegha-Afunaduula There has been so much talk and Now we learn the 1995 Uganda action in Uganda’s fledgling oil Constitution, which has been changed The President all of a sudden industry. For a long time all talk and many times to allow the President announced to an astonished country action have began with the President to stay in power for an unlimited that Uganda had trained students in and ended with him. Perhaps no one time, and also the leeway to decide various petroleum fields. However, in Uganda has had so much impact whether or not laws to protect land, he never told the country how those on the industry on a sustainable basis natural resources and our people students were picked, who was picked like him in recent times. against excesses of government and and why? There were suspicions firms are in place, was actually a that those who were trained were Increasingly Ugandans have joined brain child of the President. predominantly from one region of the President in talking and taking Uganda and that some could even action on oil. Those who have A lot of land in the Albertine region be non-citizens. Until the full list and joined the President are mostly has been grabbed for oil purposes and backgrounds of the beneficiaries are questioning his words and actions of also for commercial crop growing, revealed, it is difficult to say with his government, in the oil industry: agrofuels and carbon trade –dubious! certainty the criteria used to pick land grabbing, corruption and forced It is not surprising that a section of them. For the time being it remains migrations of whole communities. MPs now want the President’s oil dubious that people were trained speech expunged from the Hansard secretly. They are worried that the way things (Daily Monitor, 14 Feb 2012). It are being done and fast-tracked should, however, be pointed out that An oil training institute, Kigumba, smells of an oil curse in the offing. it is not only the agreements that was set to start churning out They see the agreements being fast- government has reached with the oil graduates who will specialize in tracked between government and oil firms that smack off dubiousness in providing accessible entry-level firms as “dubious oil deals”. the oil industry. skills development courses to ensure local workers can enter the oil and The deals allow the firms to take 74% The President announced oil had been gas industry. It was targeting the of the proceeds from the oil sales, discovered during his rule although Banyoro, where oil was found. It was and even share the remaining 26% we know it has been a known fact claimed the initial batch of students with the government. This shows since time immemorial that Uganda at Kigumba was 28. The question that vested interests-national and has oil. The people of Bunyoro had is how many Banyoro were among foreign are determined to exploit the observed oil spilling from the ground. the first students trained in various dubious deals to exclude Ugandans Sir Gerald Portal visited the seeps fields of oil and gas industry outside from benefiting from the burgeoning in November 1893. Col Sir James Uganda, and how many Banyoro industry. H. Sadler, British Commissioner were to be trained at Kigumba? in Uganda issued the first oil Even with the intervention of exploration license on January 7 According to the Ministry of Energy, Parliament to ensure no further 1902. The petroleum potential of the institute was to provide training agreements are signed, the President Uganda was first documented by at diploma, certificate and bachelor told Parliament recently, in what A.J Wayland in 1925. The first well levels. It is, however, unclear whether has been termed “The Museveni “WAKI-B1” was drilled in Butiaba the institute has been cleared by the Oil Speech” (Daily Monitor, 14 area in 1938 (ESA, 2010). Because of Ministry of Education, what courses Feb 2012), that he had directed his poor quality of oil attempts to exploit are actually taught and to which Minister of Energy to sign fresh it failed in 1912-3, 1927-9, 1936-9, University in Uganda or abroad it production sharing agreements with 1950-2, 1963, 1968-9 and 1971-2. So is affiliated. One school of thought Tullow allowing the firm to finalize a it was clear that the President wanted argues that the school was established delayed US$ 2.9 billion asset sale to to distort the truth by suggesting to give the impression that Uganda France’s Total and China’s CNOOC. that before his rule there was no oil is ready for the oil industry through history in Uganda. producing people with skills in oil 4 NAPE LOBBY and gsa industry. That was dubious. industry is fully operational, there will be too much pollution of water, One thing seems to be true. The West It was not clear why Engineer Hillary soil, animals, plants and atmosphere, badly needs oil and will use African Onek was moved from the Ministry and social costs are likely to be high. leaders of oil countries to get it by of Energy to the Ministry of Internal However, since CNOOC is not a party hook and crook. This too is dubious. Affairs. One school of thought says to the high social and environmental Is it possible that by Government the oil dynamics could have had standards of AfDB, EIB and World succumbing to an arrangement where something to do with it. Was Onek Bank, these issues will not be taken oil firms take 74% and even grab part stepping on the toes of some big seriously by both Uganda and China. of what remains (26%) the public people active in the oil sector? Or That is dubious.
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