Ugandan Lawmakers Mull Legal Action against Govt on Oil Deals

KAMPALA, Uganda (Dow Jones Newswires), Mar. 11, 2009

Ugandan lawmakers are considering taking legal action against the government to force it to reveal details of the agreements signed with foreign oil companies before production starts, a lawmaker said Wednesday.

Abdu Katuntu said parliament should be allowed to look at agreements before production starts to assess the potential benefits to the country.

Katuntu said that, because oil had caused conflicts in many oil-producing countries in the world, the government should be transparent when dealing with foreign companies.

Uganda is preparing to start oil production in the first quarter of 2010 and has signed an agreement with U.K.-based Tullow Oil PLC. However, the government has declined to reveal details of the agreement citing confidentiality clauses.

However, Stephen Birahwa, a lawmaker representing Uganda's ruling party, said a period of calm was needed to allow government attract more investors in the sector.

Birahwa is a member of the natural resources committee, which is formulating legislation to guide oil exploitation in the country.

Last month, Uganda's largest opposition party, the Forum For Democratic Change, called on the government to reveal the details of its pact with Canada-based Heritage Oil Ltd.

Residents in Amuri district threatened to attack Heritage workers, accusing the company of not employing them, a charge denied by the company.

It is estimated that Uganda has more than 2 billion barrels of oil reserves with only about 30% of the oil region explored.  

Copyright (c) 2009 Dow Jones & Company, Inc.