GOXI

sharing in governance of extractive industries

While Uganda is taking the right track regarding the formulation of a legal and policy framework to manage oil production, the pace of creating the laws, policies and regulations is slow, according to Dr. Kent Moors.
This, Moors said, may not be concluded within the next two years and this poses a risk where critical decisions may be taken by few players, leaving out many stakeholders.
"The draft bills are very good and if you don't have good laws, decisions and monitoring cannot be made," he said. "If there are no regulations, how can you criticise government?"he wondered.
He was speaking last week at Hotel Africana during a meeting on the topic: "Civil Society and the Petroleum Law in Uganda: Revenue, Environmental, and Industry Management". The meet was organised by over 20 non-Governmental organisations with funding from the US embassy.
Moors, who is an adviser to many oil producing countries and companies, was providing training to the Civil Societies about the key elements of petroleum legislation, revenue management and benefit sharing, waste management and environmental protection, and industry oversight and corporate governance.
The country has a law and policy on petroleum, which were effective during exploration phase. However, the law is to be replaced by two laws, one on oil production and another on revenue management.
In the addition to the laws, a number of regulations will have to be formulated to implement the legal framework.
Civil society organisations were concerned about the secrecy over the production-sharing agreements complaining that it was difficult to hold the companies accountable.
"There has never been any country that has published its production agreements with the companies. There are confidentiality clauses," Moors explained.
"Contracts must be secret but strong regulations and legislations can prevent the oil curse and ensure transparency and accountability."
Honey Mallinga, the assistant commissioner in the energy ministry, said: "during initial stages of the contracting investments, promotion was through road shows which were not easy.
He added: "A lot has been said about the production-sharing agreements the Government entered into with the oil companies and, from the Government point of view, this is still one of the best contracting method worldwide."
Currently, Uganda is preparing to develop petroleum laws that will govern the nascent oil and gas industry expected to transform the country's development and improve socio-economic conditions.
Mallinga said commercially viable quantities of oil and gas resources have been discovered in the Albertine rift valley in western Uganda, which also straddles the eastern border of the Democratic Republic of Congo.
"Government systematic efforts to promote the exploration of petroleum in the country started 20 years ago by acquisition of geological and geophysical data in the Albertine Graben.
This data was used to attract oil companies for investment into exploration for hydro-carbons.
The efforts have paid off with the discovery of commercial oil and gas resources in the country, said Mallinga.
"The first petroleum discovery was made at Mputa-1 and subsequently, remarkable progress has been made on an annual basis."
However, petroleum exploration in Uganda had started over 90 years ago. Exploration stalled between 1940 to early 1980s mainly due to the impact of the World War II, political instability and change in colonial policy when East Africa was zoned as an agricultural area.
This, Mallinga said, was in comparison to West Africa where oil was near the surface and the region was zoned as a petroleum area.
He also said the discovery of oil has come with various challenges such as, "how to manage the oil and gas industry with the current legal and instructional frameworks, excitement and expectations created by the discoveries.

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Replies to This Discussion

Ibrahim, in the future you can post events like this before in the events section: http://extractiveindustries.ning.com/events/event/listUpcoming in case some GOXIans wish to attend.

By the way, have you seen Keith Myers' blog post on Thursday about developments on the DRC side? http://extractiveindustries.ning.com/profiles/blogs/drc-licensing-i...
Ibrahim - just to clarify, I know you had posted the event as a discussion, but I thought it'd be helpful to post on the events page.

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