Minister Says Ugandan Oil Contracts Will Remain Secret

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

Uganda won't reveal details of its oil exploration and production sharing agreements with foreign companies because its bound by confidentiality clauses, the minister of energy and minerals development told Dow Jones Newswires Tuesday.

Hilary Onek said in a telephone interview that revealing details of the oil deals wouldn't be in the best interests of the government or oil companies

"Production sharing agreements are confidential, and we shall not reveal them to protect our interests as well as those of the private players in the sector," he said.

Onek said each company operating in Uganda has its own unique contract and new entrants don't necessarily have to enter into contracts under similar terms and conditions.

Since the start of the year, government has been embroiled in disputes with politicians and activists over its failure to disclose the contents of oil contracts ahead of the start of oil production, expected in the next three years.

Uganda's largest opposition political party, Forum for Democratic Change, has petitioned Transparency International to compel the government to reveal the contracts. Ugandan activists have also petitioned the High Court to compel government to make the content of the agreements public in line with the Ugandan constitution and freedom of information laws.

The executive director of Uganda's National Association of Professional Environmentalists Frank Muramuzi said that by refusing to reveal oil deals, government must be shelving dubious provisions.

"We have seen it happen in other countries, oil revenues must be used to benefit all Ugandans," he said adding that the anticipated oil production poses many challenges to the country's environment and requires careful handling.

Uganda has oil contracts with U.K.-based Tullow Oil PLC, Heritage Oil Ltd., Tower Resources PLC and Dominium Uganda Ltd.  

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