President Museveni last night dismissed as “absolute rubbish” allegations that he could have received personal payments from Italian oil firm, ENI, in return for Heritage Oil’s exploration rights and said Tullow Oil official Andy Demetriou who reportedly made the claims is an “idiot”.
In one of the several US diplomatic cables released by whistle-blower website, Wikileaks, in August, Mr Demetriou, who is Tullow’s head of external relations, reportedly told an official of the US Mission in Kampala on November 24, 2009: “Tullow believes ENI made personal payments to President Museveni and Ministry of Energy officials in return for Tullow’s offshore exploration rights.
“Demetriou accused ENI of using similar tactics in the Democratic Republic of Congo (DRC) to acquire exploration licenses on the Congolese side of Lake Albert allegedly already purchased by Tullow,” Wikileaks quoted leaked US diplomatic cables as indicating.
Responding to a question from Daily Monitor about the allegations during a press conference at State Lodge Nakasero in Kampala, Mr Museveni said that man who told the American Ambassador must be an idiot”.
“It’s despicable!” he said. “[For] General Yoweri Museveni Kaguta, Ssabalwanyi (loosely translated as master of fighters) to get money from a muzungu or anybody for my personal use! It is contempt of the highest order for somebody to say that.”
The President, who repeatedly dismissed Wikileaks as being “full of idiots”, added: “Even if you found me asleep and put money with a note [saying the payment] is from ENI, then ENI must have made a very bad investment because any did not get anything for it.”
The Italian oil company, in which deposed Libyan leader Col. Muammar Gaddafi reportedly had significant shares, made a spirited bid to acquire, at $1.5 billion, the 50 per cent stake of Heritage that was at the time exiting from Uganda’s oil business.
Initial official accounts indicated that Tullow, the other co-investor in Lake Albert oil finds, invoked its first right of refusal to block ENI’s offer, resulting in the intended farm-down with China Offshore Oil Company (CNOOC) and France’s Total.
ENI deal stopped
President Museveni, however, revealed yesterday that he stopped the ENI deal that had come close to being inked and directed instead that the stakes be sold to China that has a larger market.
“I am the one who stopped them (ENI’s acquisition) and I guided the Ministry [of Energy] that you work with especially the Chinese. Why? Because China is a big economy.”
We were unable last night to contact Mr Demetriou who was reported to be in Nairobi.
But in an earlier email response on the same subject, Tullow’s spokesman Jimmy Kiberu said: “These cables refer to a set of meetings between Tullow officials and US Embassy staff in late 2009. US embassy staff have exaggerated statements made by Tullow officials about rumours with regard to corruption for reasons unknown. Tullow personnel have not, at any point, accused any government ministers or ENI of corruption [and] Tullow apologises to the government of Uganda for the embarrassment caused by this mis-reporting.”
Yesterday, the President said he had established through two separate inquiries he commissioned – one conducted by private investigators and the other by Inspector General of Police Kale Kayihura - that documents Parliament relied on to pass a motion requiring three senior ministers implicated in allegedly accepting huge pay-offs from foreign oil companies to step aside to allow for investigations, were “forged”.
Parliament on Tuesday resolved to investigate claims Prime Minister Amama Mbabazi, Foreign Affairs Minister Sam Kutesa (who stepped aside yesterday but for separate allegations of abuse of office and causing financial loss related to the 2007 Chogm summit presently before the Anti-Corruption Court) and Internal Affairs counterpart Hilary Onek, together with senior technocrats, allegedly shared at least $100 million allegedly from Tullow.
State House called yesterday’s press conference attended by Energy Minister Irene Muloni and her PS Kaliisa Kabagambe, Information Minister Karooro Okurut and URA chief Allen Kagina to explain to the nation sticky issues burning in the nascent oil sector and try to assuage public and MPs’ fears something is going amiss.
President Museveni said he is yet to study the resolutions Parliament passed on Tuesday and will summon legislators subscribing to the ruling NRM party to further discuss the decisions they took without consulting him as the party chairman yet some of them have serious consequences.
At the press conference, Ms Kagina moved to calm fears that Shs1.1 trillion paid by Tullow in capital gains tax has disappeared from a Bank of Uganda account as alleged in Parliament during the Monday-Tuesday special sitting.
She, however, differed from Finance Minister Maria Kiwanuka who unsuccessfully attempted to convince Parliament on Tuesday that this money was spent on the planned Karuma hydro power project.
The URA commissioner instead said the money is safe in the central bank, even as President Museveni hinted that he too had been told that the money “delayed for two weeks” between the tax body’s account at the bank and the Consolidated Fund account.
The President suggested his informants suspected that profiteers in government may have moved the cash onto a fixed deposit account to grow interest for their personal use during the period.
Facts about oil fields
•20 oil fields discovered containing 64 wells, 59 of which are productive (have oil).
•There is approximately 2.5 billion barrels so far discovered. Between 1 billion to 1.5b barrels is extractable. If country produced 100, 000 barrels of oil per day, it is estimated the deposit will be exhausted within 30 years.
•Exploration on-going in 10 areas in Rhino Camp (Arua District), Pakwach (Nebbi District), Semiliki and around Lakes Albert and Edward. Total oil volume in Uganda is estimated at 6 billion barrels
•Energy Ministry PS Kaliisa Kabagambe says it’s profitable to build refinery and process the crude. Country poised to earn $3-4b annually at production level of 60, 000 barrels of oil a day.
•Under agreement negotiated before confirmation of oil deposits, companies involved will in the period of recovering the cost of their investment, get 63.5% of the revenues while Uganda takes 36.5%. Upon full cost recovery, the government share of the revenue will increase to between 72.6-80.5%.
President Museveni chided PS Kabagambe for allegedly smuggling the stabilisation clause in the Production Sharing Agreement that insulates foreign oil companies against making losses.
“That one I rejected it and I am the final person to decide. That thing (proviso) is not there because I have not accepted it unless you (PS Kabagambe) smuggled it”.