Report on recoverable oil costs coming out, says government

Mr Peter Lokeris, the State Minister for Mineral Development. FILE PHOTO

What you need to know:

Returns. Shs492.5 million was recovered from oil companies between 2006 and 2008.

The Office of the Auditor General (OAG) has said a second audit process of recoverable oil expenditures is ongoing and a report will be tabled soon in Parliament for discussion.

The audit in works covers among others, oil fields-Blocks 1 and 3 A (operated by Tullow) for the years 2009, 2010 and 2011.
It is being conducted by both the OAG and two private audit consultancy firms, PriceWaterHouse Coopers and Ernst & Young.

The director of audit-Central Government 2, Mr Joseph Hirya, revealed last week that the process is intended to recover monies claimed in activities by the International Oil Companies and to probe their operations.
“This is a value-for-money audit,” Mr Hirya, said at a workshop organised by Makerere University, Global Rights Alert and Pay What You Publish-Norway.
“The OAG, starting with the financial year/FY 2008/9, audited and reported entities in the Petroleum/Energy sector basing on the sector-wide audit approach,” he added.

He said, under this approach, a specific unit with a staff of 10, nine accountants and one geologist, have been assigned the task of all entities.
The audit also covers other fields-Block 2 and 5, respectively for the year that ended December 2009.

He added that current spendings are catered for under the five-year energy sector audit strategic plan (2011-2016) being implemented.
State Minister for Mineral Development Peter Lokeris told participants that ongoing audit works by OAG is one way government is ensuring transparency in the emerging sector.

Declaring incomes
He said: “Nobody is refusing us to sign these things for sure we will sign the Extractive Industries Transparency Initiative (EITI).”
EITI is a voluntary mechanism, which requires countries to declare the income they earn from their extractive industries.
Companies operating in those countries also declare the payments they make, to host governments.

The workshop titled, “Towards a transparent and accountable natural resource regime in Africa: Awakening citizen’s participation” attracted participants from across Africa’s resource rich countries-Tanzania, Ghana, S. Sudan, Kenya and Mozambique.

Under the five-year Master Plan for the oil sector, the OAG has since audited the jealously guarded Public Sharing Agreements) and issued reports.