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We are wasting time, says Tullow chief

The Chairman of Tullow Oil’s Ugandan subsidiary has expressed disappointment at the slow progress towards oil production since the 2006 discoveries in the Albertine Graben.

“In Ghana, it took them two years to commence production of their oil after it had been discovered. Kenya, after discovering oil this year, has asked Tullow [Kenya] to deliver the oil as fast as it was done in Ghana.  But in Uganda, we are still negotiating confidentiality issues, stabilisation clauses, etc,” said Elly Karuhanga.

Mr. Karuhanga, who is also the President of the Uganda Chamber of Mines and Petroleum also faulted Ugandans, including civil society, for continuously “harassing” oil partners in the country.

He was speaking at a public meeting organised by ActionAid International Uganda and Oil in Uganda to discuss key issues in oil governance as Uganda transitions from exploration to production.

“There has been a lot of excitement about oil. People say that these oil companies may steal their oil. The media is also hyper and as a result, the companies feel as if they are under siege. Neptune and Dominion have left, so now we are left with Tullow Oil to harass and condemn.”

Neptune Petroleum Uganda, a subsidiary of  the UK based Tower Resources, invested more than US$ 50 million in exploring the Rhino Camp basin in West Nile, but failed to find oil before its licence expired at the end of March. Dominion Petroleum, which was acquired by UK based Ophir Energy in a “friendly take-over” in February, is also now withdrawing from the Lake Edward block that it has prospected unsuccessfully since 2007.

Mr. Karuhanga warned against demonising investors because it ultimately turns them away, causing them to invest their money elsewhere.

“We must think about making Uganda a good place to invest and forget about demonising our investors. Capital is a coward, it is easily scared and it is not a friend of anyone. It can disappear at any time and go to a place where there is no hostility. Yet there is no country which can grow without capital.”

He said that a big company like Total investing in Uganda was a great achievement for the country, considering that it was one of the top five companies in the world. He urged Ugandans to take advantage of the resources they have to attract more investments.

“If the whole of Total walked away like Dominion did, saying that Uganda was a difficult place to work in, all tourists, hoteliers and other investors would think twice about investing here.  If you have a nice suit in your wardrobe, you should wear it.”

 Civil society, riled, responds

Mr. Elly Karuhanga’s submission did not go down well with most of the participants at the meeting.

Isaac Kimaze, CEO of Legal Brains Trust, said that Mr. Karuhanga was patronising and arrogant in his submission.  He added, “We all stand to gain from this oil, not only Tullow Oil. I, therefore, expect the cake to go around. But if the governance aspects are not addressed, then managing the oil industry will be serious business. People are now empowered and they know their rights.”

Kellen Karokora, a Counsellor, also said that although Mr. Karuhanga was spot on in some ways, he missed out the element of bad governance. “The main issues are greed, corruption and bribery, so how can you expect good laws in such a situation? I would not blame the masses like he did because there is no trust in government and its structures as well as its leaders.”

The meeting was held at Hotel Africana, on May 31 2012, during a Civil Society Fair organised by the Uganda National NGO Forum.

Report by CM