Uganda Tables Long-Awaited Petroleum Bill

Country: Uganda
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After months of waiting, and years of operating under a 20-year old oil law, Uganda's government formally presented its petroleum governance bill on Wednesday, 8 February.

The Petroleum (Exploration, Development and Production) Bill, 2012, would inaugurate a unified governance system for Uganda's oil and gas industry, managing the major oil reserves discovered in the country in 2006. Among other provisions, the bill would establish a Petroleum Authority of Uganda, regulate royalties, create a transparent and competitive licensing process as well as environmental provisions to restore lands damaged by petroleum production.

The bill is now under review in the parliamentary Committee on National Resources, where the committee will hold public debates and consult with civil society. In two weeks, it is expected to be tabled in parliament for a second reading, at which time parliamentary debates will begin.

Oil became a pressing issue in Uganda after the 2006 discovery, which could bring in an estimated $6.3 million annually over 20-25 years of production – a windfall that could dramatically alter the country's standard of living. Public expectations for the oil sector vary between hope for improved development and fear that the wealth will be squandered or exacerbate existing economic inequalities.

An early draft of the bill was released in March 2010, attracting global scrutiny and a wide consensus that the bill required further review. Per RWI's analysis of a preliminary draft released in September 2011, the bill needed improvement clarifying the roles of different institutions and agencies, whose overlapping mandates could hinder effective governance and accountability.

RWI has worked closely with Ugandan partner Africa Institute for Energy Governance (AFIEGO) for the past several years to train parliamentarians, media and civil society on the importance of sound legal frameworks for managing the oil sector, stressing that oil revenues alone cannot transform Uganda in the absence of clear laws and strong institutions.

Although a parliamentary moratorium on any new oil deals was passed in October, pending a new petroleum law, on 3 February the government announced that it had signed two production sharing agreements with Tullow Oil, disregarding the moratorium and adding urgency to the push for a guiding legal framework. On 10 February, President Museveni addressed parliament to explain why he had approved the agreement despite the moratorium, arguing that delaying the deal would hurt the country. The opposition boycotted the session.

While civil society has not yet seen the final version of the latest bill, the draft is not expected to vary significantly from the preliminary version released in September. AFIEGO is working with parliament to obtain a copy of the final bill.

Meanwhile, RWI and civil society networks in Uganda are coordinating their efforts to provide input when the bill comes under public debate.

Uganda's oil sector has a chance to perform well and avoid the mistakes made in other African resource rich nations. The parliament, the executive, civil society, local communities and development partners each have a key role in making Uganda's entry into petroleum production a success story.

Silas Olan'g is RWI's Africa senior regional associate.