Ugandan Petroleum (Exploration, Development and Production) Bill

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Uganda's draft oil law, the Petroleum (Exploration, Development and Production) Bill 2012,[1] was first approved by cabinet in 2010[2] and was finally tabled before parliament in February 2012. Once approved, the new law would replace an oil act that dates back to 1985, long before hydrocarbon deposits were discovered in Uganda in 2006.[3]

Overview

The purpose of the bill is to operationalize Uganda's National Oil and Gas Policy (NOGP), which was published by the Ugandan Ministry of Energy and Mineral Development in February 2008. The bill vests ownership of oil in the government on behalf of the republic of Uganda. [2]

If approved, the bill would establish three separate institutions originally proposed in the NOGP:

  • a Directorate of Petroleum, an oil and gas policymaking and monitoring body subsumed under the Ministry of Energy and Mineral Development
  • a Petroleum Authority, a regulatory agency borne out of the current Petroleum Exploration and Production Department
  • a National Oil Company as a separate commercial entity[2]

The powers of the Petroleum Authority include monitoring and regulating exploration, development and production; processing; transportation; and storage of petroleum and gas in Uganda.[2]

Main article: Ugandan Petroleum Authority (proposed)

As envisaged by the NOGP, the National Oil Company would have the responsibility to manage, on behalf of the state, the commercial aspects of petroleum activities and the participating interests of the state in the licences.[2]

Main article: Uganda National Oil Company (proposed)

The bill also establishes two petroleum commissioners: a Commissioner for Petroleum Exploration, Development and Production, who would assist in policy development, promotion and licensing of exploration, development, production and transportation of petroleum; and a Commissioner for Petroleum Processing, Transportation and Storage, who would perform similar functions for the processing, transportation and storage of petroleum and gas processing.[2]

Clause 9

Clause 9 of Uganda's oil bill grants the Minister of Energy and Mineral Development the sweeping powers of approving, granting and revoking oil licenses;[4] initiating, developing and implementing oil and gas policy; submitting draft legislation to Parliament; issuing petroleum Regulations; negotiating and endorsing petroleum agreements; approving field development plans; promoting and sustaining transparency in the petroleum sector and approving data management systems. The website Legal and Policy Review wrote that "Clause 9 gives the minister unfettered powers to deal with the petroleum sector as he/she pleases," and called clause 9 "undesirable"[5] in part because of ongoing corruption scandals within high ranks of the Ugandan goverment.[6]

In early November 2012, members of parliament (MPs) amended the bill to trim the minister's powers and have the aforementioned functions discharged by the Petroleum Authority. Prime Minister Amama Mbabazi claimed that the amendment was tantamount to removing "the executive and the president from the control of the country's oil resources."[4] Later in November, the president and his supporters in parliament attempted to reinstate Clause 9 and restore the minister's power over the sector but, on November 28 when a vote to recommit the bill to allow debate on Clause 9 was to take place, a contingent of MPs refused to vote, chanting "our oil, no vote," according to the Kampala-based daily The Observer.[7] But the bill was eventually passed on 7 December, with Clause 9 and the minister's powers over the sector left intact.[8]

References

  1. "The Petroleum (Exploration, Development and Production) Bill, 2012", Minister of Energy and Mineral Development, retrieved 5 December 2012.
  2. 2.0 2.1 2.2 2.3 2.4 2.5 "Oil and Gas Laws in Uganda: A Legislators’ Guide", International Alert, May 2011.
  3. "Uganda tables long-awaited oil law-minister", Reuters, 9 February 2012.
  4. 4.0 4.1 "Uganda Executive, Parliament Divided Over Oil Bill", Rigzone, May 2011.
  5. "Powerful Oil minister not good for Uganda", Legal and Policy Review, retrieved 5 December 2011.
  6. "More donors freeze aid to Uganda over corruption", Huffington Post, 5 December 2011.
  7. "Oil bill: Kadaga flees House", The Observer, 28 November 2012.
  8. "Uganda: New Law Fails to Ease Oil Concerns", All Africa, 13 December 2012.