It appears that the five-year negotiation around the refinery has not yielded tangible results despite certain waivers granted by President Museveni as sweeteners to the investors.
The index by Natural Resources Governance Institute (NRGI) rated Uganda's Mining Sector as slightly better governed than oil though still in "weak" category.
It finds that like the hydrocarbons sector , licensing and local impacts are a problem.
The conclusion of the deal with the French energy giant Total is expected to pave the way for the construction of a 1,440-km crude oil pipeline from Uganda’s Albertine region to Tanzanian seaport city of Tanga.
A Ugandan source in attendance told URN that the negotiations could go on until Sunday afternoon as the two sides held cards on their chests vouching for how best their countries could benefit from the pipeline project. The pipeline will evacuate Uganda’s oil from the Albertine to the external market.
While Total E&P Uganda B.V. announced that it is has relinquished 9% of the area it had been permitted to develop in the ecologically sensitive area of the Murchison Falls National Park for environmental reasons, the Afiego Chief insists the process and term for relinquishment has not been transparent.
Petroleum Authority Executive Director, Earnest Rubondo said the first five years have been characterized by building the institution while on the same time regulating the country’s oil and gas assets.
The two agreed on the conditions of how the Uganda National Oil Company (UNOC) will join and participate in the East African Pipeline project, as well as on the Host Government Agreement which will govern the export pipeline in Uganda. The project is expected to cost the consortium USD 3.5 billion with construction expected to start early next year.
The transaction is conditional upon the approval of the company’s shareholders who will meet on July 15. The process of approval according to the rules, requires a simple majority shareholding approval. They are expected to vote and approve the deal before the sale can be concluded in Uganda.
From Hoima District, the corridor passes in between Wambabya and Bugoma Forest Reserves through a modified section of Taala Forest Reserve in Kyankwanzi District, heading in the South easterly direction near the eastern border of Kasana - Kasambya Forest Reserve in Mubende District.
Players in the industry say most of their labour force and equipment are redundant as the farm-down tax dispute between U.K. firm Tullow Oil and government rages on.
Engineer Patrick Batumbya is one of the shining examples of Ugandan engineers that defied odds by taking up jobs in areas that many thought would go to foreign oil and gas engineering firms.
The Irish company which also owns Tullow Operations Uganda in a statement hinted on the slow progress towards resolving Capital Gains tax dispute on the USD 900 million farm down to Total and CNOOC Uganda Limited.
The country is yet to finalise the National oil Spills Contingency Plan that would outline response in case of an oil spill on Lake Albert other lakes and Rivers.
The final investment decision (FID) was expected to open the tap for money to start flowing, paving the way for projects like the US$3.5bn East Africa Crude Oil Pipeline.
Construction of the 1400 km heated oil export pipeline from Hoima in western Uganda to Tanzania’s port of Tanga on Indian Ocean has stalled.
Mugalu further observes that when such projects are put up in an area, there is a given radius where certain activities are impermissible. He however, says although the ministry has already developed the Kampala Oil Terminal project master plan, the district has no clue.
The register comes as Uganda prepares to begin construction of infrastructure to have first oil out of the ground. The Infrastructure developments estimated at USD 20 billion and expected create jobs.
The idea is that all the final investment decisions for the pipeline, refinery and general developments should have been concluded by end of June for first oil 2021/2022.
