Oil Deal Paperwork Rift Widens

Documents circulated by the London based NGO, Global Witness as Production Sharing Agreements between Uganda and oil companies, are fake, The Petroleum Exploration and Production Department (PEPD) has said.
In an e-mail to us, the commissioner PEPD Earnest Rubondo said that all the agreements that the government of Uganda has entered into with the oil companies are endorsed by both parties adding that the documents circulated don’t represent a copy of the PSAs since they bear no such endorsement.

The response follows the publication and circulation of copies of the alleged PSA signed between Uganda and Tullow oil in 2012. They released documents outline the share of oil revenues the government of Uganda will get and almost every aspect of its relationship with the oil companies.

The alleged PSAs come at the backdrop of an intense and controversial debate over the management of Uganda’s oil. Government’ silence on the matter has in addition allowed rumor and speculation to dominate the debate, particularly over how revenues are allocated.

However, although Uganda insists that the circulating documents are fake, Global Witness also maintains that the documents are authentic.

“Global Witness has seen final signed copies of the contracts and is confident that they are authentic,” Global witness campaigner George Boden stated in the e-mail.

Boden said that government should disclose its own copies for the sake of transparency saying that all the three companies have told Global Witness that they do not oppose the disclosure of the contracts.  “If there is any government concern about the authenticity of the published contracts, the government can address this by publishing its filed copies.”

Meanwhile, Rubondo also described the organisation’s press statement published together with the alleged PSA’s stating that the PSAs are not comprehensive of the environment as grossly misleading.
“The contracts appear to lack some important human rights and environmental safeguards. This is of particular concern given the unique habitats of the oil region in Uganda which sits on the DRC border and the Nile River,” the statement read.

But Rubondo explains that PSAs don’t replace the laws of the country. They are simply contractual arrangements that are executed in compliance with other laws governing the country adding that Uganda’s oil and gas sector is governed by a comprehensive legal framework which includes the Constitution.

“All the PSAs entered into by Government to date have provisions that require the licensee or contractor to comply with the laws of Uganda.” Rubondo said. It is explicitly stated that a PSA is governed by these laws.” He added.

The other laws that govern the sector and provide for the protection of the environment are the Petroleum (Exploration, Development and Production) Act, 2013, the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013, the National Environment Management Act, the National Oil and Gas Policy 2008 among others.

Rubondo stated that government has been recognized for the introduction of several environment best practices such as the strict requirement of the Environmental Impact

Assessments for all activities in line with the National Environment Act as well as the use of the ever-green burner instead of open flaring of crude and gas that was practiced in the early stages of petroleum operations.

He explained that licensees are, in executing their contractual obligations, required to comply with the laws of Uganda that govern specific issues including, but not limited to, environment and other social issues such as human rights.

Boden said that GW acknowledges that PSAs are only a part of the overall regulatory framework and that they compared them against the existing petroleum laws but hopes that government make them better by addressing a few gaps and weaknesses.

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