Uganda Minister Outlines Oil Production Deals To Parliament

30th Jun 2010 09:34

KAMPALA, Uganda (Dow Jones)--Uganda's energy and minerals development minister has outlined the country's oil production-sharing agreements with private oil exploration companies to parliament Tuesday, yielding to persistent demands for details of the agreements by lawmakers. The agreements stipulate that Uganda's share of the oil revenues will continue to rise with increased production levels, the minister Hilary Onek said in parliament Tuesday. The agreements compare well with those of other oil and gas producing countries, due to the discovery of commercial reserves in 2006, Onek said in a ministerial statement. The oil production-sharing agreements stipulate the terms under which companies and government share profit from oil extraction. "The total take for the country is on average 70%," he said adding that at the time the government negotiated the agreements, commercial oil reserves had not been confirmed in the country. Uganda has oil production-sharing agreements for five blocks, and with U.K.-based Tullow Oil PLC (TLW.LN), Heritage Oil PLC (HOIL.LN) Tower Resources PLC.(TRP.LN) as well as Dominion Ltd. Uganda has discovered at least a billion barrels of oil in three blocks in the Lake Albert basin and the country is expected to start commercial oil production in the next three years. Since last year, Ugandan lawmakers have been calling for the revelation of the oil deals in order to promote transparency ahead of oil production; however, the government has in the past declined to reveal the agreements, citing confidentiality clauses. During Tuesday's session, the speaker of parliament didn't allow lawmakers to debate Onek's presentation after the minister called for protection of the rights of the parties and confidentiality. Early this month, Tullow which is the majority owner of the three blocks where oil has been discovered, said it wouldn't object to the disclosure of its oil production-sharing agreements signed with the Ugandan government. "We cannot be upset about the disclosure of the agreements because they include information on how we are supposed to go about our work and the revenue-sharing proportions," Brian Glover, Tullow Uganda's general manager said. -By Nicholas Bariyo, contributing to Dow Jones Newswires; 256-75-2624615 [email protected] (END) Dow Jones Newswires June 30, 2010 04:34 ET (08:34 GMT)