Members of Parliament up in arms against government agreements with Tullow Oil

Members of Parliament are threatening legal action against the government and oil company Tullow oil for going against the Parliament resolution halting activities in the oil sector pending a new law and investigations into the sector.

The government and Tullow Oil Company today signed two production sharing agreements and one production license to operate three oil wells, 3 months after Parliament passed resolutions blocking the same.

In October last year during a special session of the House, MPs unanimously agreed that a moratorium be placed on executing oil contracts until the necessary laws governing the oil sector are passed.

Aidan Heavey Tullow Oil CEO

Today, the Ministry of Energy and Tullow Oil revealed that negotiation had been concluded for petroleum licenses over Exploration Area 1 in Pakwach and Kanywataba for 1 year and 6 months respectively while Kingfisher Field covering Hoima and Kibaale districts.

The Minister of Energy, Eng. Irene Muloni explained that the decision to sign the new agreements was based on legal opinion from the Attorney General that the resolutions were advisory, adding that her ministry had received clearance from the Ministries of Finance and Justice to enter into the agreements.

Eng. Muloni further says in these agreements, Tullow Oil is expected to partly farm out part of its assets in Uganda to CNOOC (33.3%) and TOTAL (33.3%) as agreed in the Memorandum of Understanding signed between Tullow and the government.

The Chief Executive Officer at Tullow, Aidan Heavey said the signing of agreements is a vital step towards the development of the oil and gas industry in Uganda and East Africa.

But Bugwere MP Abdul Katuntu says the government action is tantamount to abuse of Parliament and MPs will not take it lightly.

He says the new agreements show the government and Tullow oil do not respect parliament and the legal process since there is a case before court to halt the oil activities due to irregularities in the licensing of oil companies.

MP Wilfred Nuwagaba says Ugandans will not consider the new license and production agreements as valid, saying they are meant to serve interests of Tullow and a few governnment officials.

But Muloni insists the new deal is good for Uganda as the country stands to gain over 1,7 million US dollars.

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