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L-R: Hon. Peter Lokeris, Hon. Michael Mawanda and the Anti Corruption Coalition's Abbas Kigozi

Lack of information hindering transparency

Civil society and Parliamentarians have criticised the Uganda government for with holding information on the oil and gas industry, arguing that it hinders governance of the sector.

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A converted vehicle gets refilled at Ubungo station (Photo: Beatrice Ongode)

Tanzania building a gas-powered economy

Buoyed by ‘world class’ gas discoveries over the past few years, Tanzania is hastening plans to put its abundant resource to local use.

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Don Byanyina

Mining sector critical for Uganda’s economic future

Uganda’s mineral industry remains significantly unexploited and under-regulated within the East African region.

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Hon. Elly Karuhanga

“We should not rush”

Hon. Elly Karuhanga is the Chairman of the Uganda Chamber of Mines and Petroleum and former President of Tullow Oil in Uganda. He is also a former Member of Parliament. Oil in Uganda caught up with him at his office in Kampala, where he briefly shared his thoughts about Uganda’s extractives

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Ugandans are being encouraged to enter into joint ventures with international oil and gas contractors but it is unlikely they can afford that level of investment.

500 billion boost for local businesses

The Uganda government is setting up a fund to support local businesses servicing the oil industry, as the sector progresses towards the development phase.

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Did you Know?

Cost oil, Profit oil

If a company finds oil in an area that it is exploring, it is usually entitled to recover the costs of its investment from sale of the oil it discovers.  Eg, if the company spends $100 million on exploration and production, and finds oil worth $500 million, it is entitled to recover its $100 million from total sales of the oil; this is called “cost oil.”  The remaining $400 million is called “profit oil” and is divided between the company and the government in accordance with the Production Sharing Agreement (PSA) they reached.  The PSA may outline a timetable for the company’s recovery of “cost oil”– for example, stipulating that during the early years of production the company cannot take all of the oil as “cost oil” but that a certain percentage of it must be counted as “profit oil,” to ensure that the government does not have to wait for years before seeing any share of the profits.  (See also Production Sharing Agreement.)

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