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Tullow Manager says Uganda PSAs are great, trust me

Posted by: CanuckJacq on February 11, 2010.

02/11/2010 by JR Russell

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Katherine Haywood in today’s Daily Monitor reports on the controversial and secret Production Sharing agreements in place between Heritage Oil and the Ugandan government.

The April 2009 Ernst & Young report compiled for the Government of Uganda reveals that Article 33 of the Production Sharing Agreement between Uganda and Heritage Oil & Gas specifies that “if there is any change, or series of changes, in the laws or regulations of Uganda which materially reduces the economic benefits” of the company, the government must make substantial economic compensation.
from the Daily Monitor, Uganda

The findings are part of the ongoing research into the deal by activist group PLATFORM and, “a coalition of 14 Ugandan non-governmental organisations”.

This means of course, Ugandans will lack the ability to legislate for working hours, workers rights, environmental concerns and production standards among other things, without compensating the company. Heritage Oil have the PSA in question now, but an agreement to sell to Irish/UK Tullow Oil is almost complete.

There are also substantial concerns about the actual return on investment Uganda will see from the agreements. While the government has claimed 80 per cent as the figure, reports from PLATFORM have indicated that the figure could be as low as 47 per cent, depending on market variables, and at the very best, 79.5 per cent in an unlikely scenario.

The Daily Monitor managed to get a comment from Tullow Oil‘s Business Unit Manager (just think of the acronym fun) in Uganda, Brian Glover.

Brian Glover, Business Unit Manager for Uganda and East Africa, said, “Tullow firmly rejects the conclusions of the recent Platform report.”

He said commercial confidentiality prevented him from discussing details regarding the PSAs but he told Daily Monitor, “I can assure your readers that the PSAs are in-line with best practice around the world.”
from the Daily Monitor, Uganda

Uganda has been the subject of a lot of news recently for charging reporters critical of the government with Criminal Libel, keeping the details of the PSAs a secret even from some government ministers and also considering a bill that would introduce the death penalty for gays, lesbians, transpeople and their allies.

Reports out of Uganda also indicate that President Museveni‘s party, the National Resistance Movement, have been harassing media outlets that give a voice to the opposition party.