Museveni again meets NRM Caucus over oil sector deals

Monday December 5 2011


President Museveni today meets NRM Caucus again to try and convince members to back him on a $2.9 billion (Shs7.3 trillion) oil deal to bring Total-CNOOC into Uganda’s oil industry through a farm-out by Tullow Oil.

Sources who attended a caucus meeting at State House Entebbe on Friday said the President wants MPs to debate the matter today, in a last-ditch effort to sway the majority in Parliament to backtrack on the House resolution that put a freeze on new contracts until oil laws are in place.

“The President said he wanted to brief us on the ongoing negations with Tullow, that he wants to keep us informed as his partners. He gave us copies of the stabilisation clause in preparation for tomorrow’s debate on this transaction,” a member who attended the meeting said. “He said we should read the documents and give him feedback on this Total-CNOOC-Tullow transaction before he signs,” the member added.

Sources quoted the President as saying negotiations with Tullow were in advanced stages and that disagreements on taxes involved had delayed the signing of the deal.
Although there was no debate on the matter on Friday, some members took issue with the President and wondered why he chose to brief the NRM Caucus and not Parliament on a matter of national importance.

President fears confidence loss
“A caucus can’t decide for Parliament,” a member, who requested not to be named in order to speak freely, said. “The President is in a hurry to sign this Tullow deal but we have passed a resolution stopping the signing of new contracts without the laws in place. What the President needs to do is to ask his ministers to expedite the oil laws because we found oil but we are moving in darkness.”

During the NRM retreat in Kyankwanzi in October, the President reportedly argued that the resolutions of Parliament on the matter would affect the $2.9 billion deal to bring Total and CNOOC into Uganda’s oil industry. The President has since written to Speaker Rebecca Kadaga rejecting the resolution on freezing oil transactions.

However, lawmakers accuse Tullow of peddling air. The MPs want government to withhold its consent to signing of a deal expected to be concluded as soon as the two parties agree on the tax component.

Mr Theodore Ssekikubo (Lwemiyaga - NRM), who petitioned Parliament to debate what members called corruption in the Oil sector, said: “We cannot get taxes from an illegal transaction. That’s why we asked him to respect the decision of Parliament.”

Asked why the President was keen to have the $2.9 billion farm-out deal with Tullow signed, Mr Ssekikubo said: “He told us that investors would lose confidence in him, a claim we rejected in public interest.”