New Bill explains how oil will be managed

A new law to regulate use and management of recently-discovered petroleum resources in Uganda will among others create a powerful minister for oil, Daily Monitor can reveal.
A first look at the upcoming “Petroleum (Exploration, Development, Production and Value Addition) [Bill], 2010) shows that the minister will control licences issued to oil operators and determine financial obligations owing to government.

Besides broad powers prescribed under the proposed law- the minister will oversee the regulator of the oil sector as well as operations of the national oil company, which the law if passed, will create.

At the core of the power of such a minister is his oversight of the Petroleum Authority.
The five-member expert board envisioned can be hired or fired by the oil minister to whom it will report.

The minister also determines the remuneration of the board and controls its finances- for example by approving borrowing by the authority. The minister will also be responsible for the functions of the proposed national oil company because statutory authority on many operations is vested in him. A long list of regulations to operationalise the law is also in his ambit.

Local content
In an effort to bring locals into the sector, the new law will require that wherever possible employ Ugandans and use Ugandan services and goods. Known as “national content” the participation of locals has become a controversial topic for both newly-producing and established oil producers.

In the case of Uganda, under the proposed law, a holder of a licence for either exploration, production or otherwise will be bound by local content aspirations. The Bill says Ugandans should be prioritised in every area where their goods and services are competitive. Other areas covered by the new law are stricter liability in case of damage from pollution arising out of petroleum activities.

However in what could be a dark horse- disclosure of information in the sector is heavily restricted under criminal penalty.