Uganda’s parliament will begin inquiries next week into production sharing agreements (PSAs) signed between the government and foreign exploration companies, a house committee chairman told Reuters.
The east African country struck oil in 2006 and has five PSAs, but activists say the government signed bad deals that hand a disproportionate chunk of the proceeds to foreign firms and have campaigned for it to disclose those agreements.
Winifred Masiko, chairwoman of the House’s natural resources committee, said she had handed details of the agreements over to legal officers so they could go through technical aspects and report to members of parliament.
“Currently there’s a range of opinion, some people are telling us Uganda signed bad deals, while some experts insist we have good agreements. We’ll look at all these views and determine whether the government signed good agreements or not,” she said.
Legislators, she said, would have a chance to look at the PSAs from Feb. 10 but would not be allowed to take copies.
A report by Platform, a British-based environmental advocacy, said in November exploration firms in Uganda would reap excessive profits from their operations.
It said they would make a return on investment of between 31 and 35% based on a medium-price oil outlook.
Minister of energy Hilary Onek is expected to appear before the committee on Feb. 16 to defend the contracts.
Analysts expect parliament will also press him on the government’s position on the battle between Tullow Oil Plc and Italy’s Eni SpA for Heritage Oil Plc’s 50% stake in oil exploration blocs 1 and 3A in the west of the country.
Minister for minerals Peter Lokeris said earlier this month Uganda had approved Tullow’s pre-emption right over the sale by Heritage of the stake in their jointly held prospects.
Lokeris said Cabinet would announce its final choice over the buyer of the stake next week.
Uganda is estimated to hold 2 billion barrels in reserves and the government is expected to conduct a licensing round later in 2010, the first in two years.
Source: www.af.reuters.com