August 13, 2013

OIL: M7 Signs Second Bill Into Law

The nascent oil industry in Uganda has received a second piece of legislation to govern its midstream activities, four months after it got the upstream law. 

The new law, the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act , 2013 became operation on July 26, a month after the president signed it on June 27, according to the Petroleum Exploration and Production Department (PEPD). The assent ended months of waiting since parliament passed the bill in February.

President Yoweri Museveni. The law, the first of its kind in East Africa, gives way for the construction of the first Greenfield refinery in Uganda.
Uganda’s President Yoweri Museveni.

The law, the first of its kind in East Africa, gives way for the construction of the first Greenfield refinery in Uganda. A report from the PEPD quoted Irene Muloni, the Energy and Minerals Development Minister as saying the Act establishes an effective legal framework to ensure that midstream operations in Uganda are carried out in a sustainable manner that guarantees optimum benefits for all Ugandans both the present and future generations.

The Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act seeks to regulate, manage, coordinate and monitor midstream operations as well as enable the construction, placement and ownership of facilities in the oil industry among other functions.

The law will also provide for an open, transparent and competitive process for licensing by the Minister and provide for health, safety and environment regulations in the industry.

An oil rig in western Uganda
An oil rig in western Uganda

Muloni previously said that activities such as licensing of the oil fields would not start until the necessary laws were passed. The new law becomes the second after the Petroleum (Exploration, Development and Production) Act 2013, which became operational after the president signed it on March 21st.

Besides the two laws, the oil sector awaits one more piece of legislation regarding the oil revenue management that is contained in the Public Finance Bill presently before parliament.

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