THE Government has finally agreed to disclose the confidential oil production-sharing agreements it signed with four companies exploring for oil and gas. The companies are; Heritage Oil, Tullow Oil, Tower Oil and Dominion Oil.
However, the Government had been reluctant to disclose the agreements, claiming â€œit was a matter of national interest.â€
Fred Kabanda, the principal geologist, said the agreements were submitted to the natural resources committee of Parliament two weeks ago.
â€œThis was after the Solicitor General perused through the documents and passed them for public scrutiny,â€ he explained.
â€œWe have nothing to hide. We have established that the explored oil reserves are at 3,500,000 barrels of oil per day.â€
Kabanda said the early production scheme was intended to supply heavy fuel oil for thermal power production and test the pressure and quantity of the oil reserves.
â€œWe agreed that royalties varying between 5% and 12% be deducted first. Then the investment recovery costs should also go to the oil company,â€ he revealed.
â€œWe shall remain with the profitable oil. This one will be shared between the Government and the oil company and the percentage will depend on the amount of oil produced.â€
Kabanda said the Government was planning to start a national oil company that would transact business on its behalf.
He said the agreements also stipulate training and employment of Ugandans so that technological skills are transferred for the benefit of the country.
â€œUganda intends to join the Extractive Industries and Transparency Initiative and we have had meetings with the World Bank and the International Monetary Fund.â€
â€œThe national oil and gas policy passed in January guides us on how to manage the resource effectively for national development,â€ Kabanda said.
Dickens Kamugisha, the Africa Institute for Energy Governance chief executive officer, said before embarking on oil production, the Government should first put in place relevant laws to ensure consistence in the governance of the oil sector.
Oil pacts to be disclosed