Delay to operationalise key institutions obstructing transparency in the oil sector

By Doris Atwijukire

On August 11, the government shortlisted 16 firms for next round of oil bids out of 17 that have expressed an interest in bidding for its six new oil blocks.

The publication of the names of companies shortlisted and the map of new oil blocks is a welcome step towards transparency in a sector.

But given the sensitive nature of the regions in which the contracts are being awarded, fragile areas like Queen Elizabeth National Park National Park including the Ngaji block on Lake Edward, a RAMSAR and UNESCO World Heritage site, that shares its boundaries with Virunga National Park in the Democratic Republic of Congo, transparency and environmental aspects should be key aspects here.

And the role of Petroleum Authority of Uganda (PAU) in overseeing the licensing process and providing technical guidance is very paramount. As this will help Uganda to guard against the potential environmental and security consequences of oil activities.

While Ugandans must trust educated government technocrats currently making complex decisions on their behalf in procuring the best bidder for the second round oil exploration, we should remember that an institution is provided for to offer guidance and expertise on this specifically.

The PAU is established under Section 9 of the Petroleum (Exploration, Development and Production) Act 2013, (upstream law). The body is mandated to oversee the licensing, regulation, supervision, refining and marketing of Uganda’s petroleum products and Section 10 provides the PAU with the following functions:

b) Review and approve any proposed exploration activity contained in the annual work programme, appraisal programme and production forecasts submitted by a licensee;

c) Review and approve budgets submitted by a licensee;

e) Advise the minister in the negotiation of petroleum agreements and in the granting and revocation of licenses;

 (i) Ensure that licensees uphold laws, regulations, rules and contract terms;

(j) Administer petroleum agreements;

(n) Ensure the establishment of a central database of persons involved in petroleum activities, manage petroleum data and provide periodic updates and publication of the status of petroleum activities.

 
These provisions would see to it that neither the Minister of Energy nor any other single individual has too much decision-making power in the governance of the oil sector. They would also see to it that accountability and transparency in the oil sector reigns, making it difficult for corruption to thrive.

 

Unfortunately, the PAU has not been operationalised to date, clipping the optimism Ugandans had in these bodies’ abilities to ensure good governance in the oil sector, particularly the ongoing procurement process for the second exploration round by government.

The question arises: how and who provides technical guidance to the minister of energy in execution of her duties in this procurement process  when the minister’s technical advisors –the board members of PAU- have not been provided with instruments to work?

This shows how government and the companies are working backwards on the issue.

Seeing the PAU, which is supposed to ensure transparency and accountability not operational, is a big blow to many Ugandans. Without the PAU, the answer is that no one is taking care of poor Ugandans’ interests. This is why we need the PAU to be operationalised not tomorrow but now.

The writer is a programmes officer Africa Institute for Energy Governance