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Who does the oil belong to?

According to Uganda’s Constitution, as amended in 2005, “the entire property in, and the control of, all minerals and petroleum in, on or under, any land or waters in Uganda are vested in the Government on behalf of the Republic of Uganda.”  In simpler terms, the oil belongs collectively to the Ugandan people, but the government, acting on behalf of the people, may extract it for the national good.  Most of the world’s countries treat mineral resources in much the same way.

International oil companies engaged in exploration and production in Uganda do not own the oil. Rather, they own the rights to a share—as determined in Production Sharing Agreements —in the profits from selling it.Their investment costs in exploration and production are also recovered from the profit on eventual sales.

Whilst this is apparently clear-cut, a key and controversial question concerns compensation for people whose land—whether they have title deeds or customary rights—is taken over for exploration or production, or whose livelihoods are adversely affected.   This is complicated by the commonly alleged fact that speculators have bought up land in Uganda’s oil prospect areas in the hope of securing generous compensation packages.  Moreover, many local people in the oil production areas also feel entitled, as a matter of natural justice, to a proportionately greater share of the eventual proceeds.