Uganda Urged on Corruption-free New Oil Bid Process

1948 Views Kampala, Uganda

In short
Global Witness, a London-based natural resource watchdog, has called on the Ugandan government to avoid corruption in the newly announced competitive bidding process for oil exploration.

Global Witness, a London-based natural resource watchdog, has called on the Ugandan government to avoid corruption in the newly announced competitive bidding process for oil exploration.

 The organisation says in a press release that the government also needs to ensure stronger environmental protection for Uganda's unique ecosystems.

Uganda last week announced the country's first open competitive licensing round for petroleum exploration. 

 According to the Petroleum Exploration and Production Department, the licensing round will cover six blocks in the Lake Albert Basin.

 The blocks are Ngassa in Hoima District, Taitai & Karuka in Buliisa District, Ngaji in Rukungiri and Kanungu districts, Mvule in Moyo and Yumbe districts and Turaco and Kanywantaba in Ntoroko District.

 The licensing round is expected to conclude with the award of licenses by the end of 2015.
 At the announcement of the bidding round, Energy minister Irene Muloni said the government has undertaken resource and risk assessment of the areas proposed for licensing.

George Boden, a Global Witness campaigner, said in a press statement that oil could be a blessing or a curse for Uganda that is why the government needs to show it has a clear and open process for selecting the right companies on the right terms for both people and environment.

Boden pointed out that until now, Uganda has handed out oil contracts for highly sensitive areas in the Lake Albert Basin, including national parks, on an ad-hoc basis with little transparency or consultation with local communities.

He adds that although Uganda's new petroleum law sets the stage for an ‘open, transparent and competitive' bidding process which, could help it secure good deals with reputable companies, key aspects of this law have not yet been implemented.

According to Global Witness, the new petroleum law potentially allows the energy minister to circumvent the bidding process and enter into direct negotiations in order to advance the state's ‘participating interest.'

Global Witness says the government does not appear to have published key documents for the bids including allocation regulations for the bidding round or a new model contract.

 The organization worries that two key institutions responsible for managing the sector, the Petroleum Authority and The National Oil Company are not yet operational, making it unclear exactly how companies will be selected or even what will be in the contracts.

 Global Witness urges the government to carefully select companies based on their previous track record and exclude those with a history of corruption, criminality, human rights violations or weak environmental protection.

On the sensitive ecosystem in the Albertine Graben including Murchison Falls National Park, the organisation says the government should recognize the environmental and social risks of extraction in such areas.

 Global Witness concludes that that while Uganda has secured a good financial deal in its existing oil contracts, these deals and Uganda's current laws could leave people and environment at risk.

Gloria Sebikari, PEPD's senior communications officer, says the bidding process will follow the law to the letter, adding that the concerns of Global Witness are catered for under the law.