The Public Finance Management Act 2015 establishes the fund into which all petroleum revenues received by the Government will be paid
Energy minister Irene Muloni
Australia’s Armour Energy Limited, which received a petroleum exploration licence from the Government has paid the required signature bonus of $316,000 (sh1.1 trillion) to the Petroleum Fund.
The Petroleum Fund is located in the Bank of Uganda. The Public Finance Management Act 2015 establishes the fund into which all petroleum revenues received by the Government will be paid.
The oil industry brings different flavours of bonuses. These include signature bonus, discovery bonus, first oil sales and production bonus. The signature bonus is a one-time fee for the assignment and securing of a licence, paid irrespective of economic success for the licencee.
Energy minister Eng. Irene Muloni said payment of a signature bonus; research and training fees and annual acreage rental fees for the first exploration period amounting to $316,000 (sh1.1 trillion) have been paid to the Uganda Petroleum Fund.
This was during the handing over of a petroleum exploration licence to Armour Energy, which will explore oil in Ntoroko district. The company will explore for oil and drill at least one exploratory well in Kanywantaba Block (344 square kms) in the district. The licence has a life of four years split into two periods of two years each.
“Signing of the production sharing agreement for petroleum exploration, development and production for the Kanywataba Block between the Government of Uganda and Armour Energy Limited, marks the successful conclusion of Uganda’s first competitive licensing round for the oil and gas sector,” Muloni said.
Lawrence Kiiza, the director of economic affairs from the finance ministry, recently said oil revenues would improve on public finances. Kiiza said the funds accrued from day to business activities of oil companies include Value Added Tax, income taxes and signature bonuses. He said an additional $244m (sh821b) was expected to be injected into the fund.
He explained that Uganda has borrowed from the models of Norway and Chile in creating the fund.
He called for a strong oversight role by Parliament, civil society and media in distribution of the oil revenues.