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Friday, June 2, 2023

President Museveni warns Parliament on Oil development

KAMPALA, Uganda – The Ugandan president has warned lawmakers against interfering with the country’s oil development plans through legal suits or parliamentary resolutions, underscoring the government’s resolve to speed up commercialization of the country’s recently discovered reserves.

Abdu Katuntu, the opposition party’s shadow attorney general, had wanted a court to halt the signing of production sharing deals with U.K.-based Tullow Oil PLC (TLW.LN), saying such a move would be in “contempt” of parliamentary resolutions passed last year that prevented the government from signing new deals with oil companies until relevant laws are enacted.

“I called the minister to sign the oil agreements before the court sitting,” President Yoweri Museveni was quoted as saying by a spokeswoman.

Museveni “warned that nobody will ever again be allowed to delay the development of infrastructure,” the spokeswoman said, adding that Museveni would “deal” with lawmakers and bodies who have embarked on schemes aimed at derailing development of the country’s oil reserves.

Lawmakers could theoretically still attempt to scupper or delay projects.

Any delay could deal a severe blow to Tullow’s plans to sell two-thirds of its stake in the country’s Lake Albertine Rift basin to France’s Total SA (TOT) and China’s Cnooc Ltd. (CEO). However, with the new oil production sharing agreements now signed, Tullow is finalizing plans to conclude the much delayed sale, which is expected to unlock at least $10 billion development projects in the country’s oil sector.

A Tullow spokesman couldn’t comment immediately.

In October last year, the Ugandan parliament passed a resolution halting the government from approving the Tullow deal, pending the enactment of relevant oil deals. Although the resolutions were later overturned by the ruling party caucus, they are partly blamed for the deal’s delayed conclusion.

Tullow, Total and Cnooc are expected to build a joint oil processing plant, a refinery and export pipeline to the Indian Ocean for an export-led project.

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