Uganda urged to 'audit' IOCs

Members of Uganda's parliament have been urged to keep a close eye on international oil companies operating in the country, with a view to ensuring that oil revenues are properly revealed and shared.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 18 -- Members of Uganda's parliament have been urged to keep a close eye on international oil companies operating in the country, with a view to ensuring that oil revenues are properly revealed and shared.

"The government should regularly audit oil companies," said Sarah Wykes, an activist and researcher on oil and transparency issues with the London-based human rights organization, International Alert (IA).

"There should also be a parliamentary committee to ensure that the oil revenue was properly managed," said Wykes, who was arrested in Angola 2 years ago while attempting to assess the transparency of its oil sector.

Wykes told Ugandan parliamentarians that although revenue from oil had potential to lift people out of poverty, it could also bring suffering to the masses as it benefited just a handful of people.

"It is [incumbent] upon you to make sure that the common man benefits and that oil does not turn into a curse," said Wykes, who added that there is also a tendency of investors to exploit countries by giving them little revenue.

Wykes' remarks struck a chord with Uganda Member of Parliament Stephen Mukitale, who called on the government to carry out consultations on oil production. "We should know the prospective and production costs so that we are not cheated," Mukitale said.

Meanwhile, Ugandan rebels known as the Lord's Resistance Army (LRA) also are eyeing the country's oil resources.

LRA's chief negotiator David Matsanga told a news conference in Nairobi that the discovery of oil in Uganda's northern region could ignite a fresh war in the region.

"There might be a fight motivated by the need to protect the oil fields," said Matsanga, referring to oil discoveries around Uganda's Lake Albert that have been reported to be among the largest finds around the region.

Earlier this week, international oil companies operating in Uganda, who confirmed the discoveries, announced plans for stepped up production from the fields.

Tullow Chief Operating Officer Paul McDade said the company recently discovered more oil in the lakes region. He said first oil production would commence in 2010, with production rising to 20,000 b/d in 3-5 years and to 100,000-150,000 b/d in 10 years (OGJ, Mar. 16, 2009, p. 40).

Contact Eric Watkins at hippalus@yahoo.com.

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