Uganda’s oil sector is dominated by political interference, with many players forced to have the president’s say before making any important decisions, researchers have said.
Writing a chapter in a recently published book on Uganda’s oil sector, Dr Badru Bukenya, an academic at Makerere University and Jaqueline Nakayiza, an independent researcher, observed that “within Uganda’s oil sector, informal institutions and arrangements tend to prevail over rules-based approaches.”
This is so, despite the fact that Uganda has managed to enact laws and put up institutions to manage the country’s oil resource. The researchers have observed that institutions like the Uganda National Oil Company, Petroleum Authority of Uganda, Ministry of Energy and others play a minimal role with the final word coming from the president.
This is a view shared by Prof Pamela Mbabazi, the board Chairperson of National Planning Authority (NPA), who writes in the same book that “there is evident political interference in the management of Uganda’s oil and gas sector.”
She adds that the President has arguably been adamant about maintaining firm control over the oil industry.
Mbabazi quotes the president as having said that “In the case of petroleum and gas, I direct that no the agreement should ever be signed without my express written approval of that arrangement.” She says the fact that Uganda’s oil governance powers are invested in the Minister of Energy and Mineral Development is “arguably rather excessive and provide a conducive milieu for possible misuse and abuse.”
The book titled Oil wealth and Development in Uganda and Beyond is authored by different experts and published by the Leuven University Press. It looks at how Uganda has positioned itself to manage its oil finds.
The book notes that International Oil Companies (IOCs) have learnt that since the President is quite an influential figure in Uganda’s oil sector, personal relations with his office are important not only in relation to sharing oil revenues but also in securing oil deals and the stability of the same.
The book shows that this extended on who gets to meet the president first. Referring to key informants, the researchers write that while Tullow, Total, and China National Offshore Oil Company (CNOOC) are joint venture companies and expected to work together, they negotiate their contracts separately and have different levels of access to the President.
“It is claimed that the Chinese, with their CNOOC, have easier access to the President compared to their counterparts and ‘their things get done very fast… actually at the moment the Chinese are way ahead of the other companies’,” the book claims.
Uganda hopes to start production in the next two years and President Museveni has been meeting executives from different oil companies to strike a deal for the Final Investment Decision (FID) to reached and unlock investments in the sector.