President arrives a Parliament
Kampala: President Yoweri Museveni has called on Members of the 9th Parliament not to cause any undue delays on oil exploration because Uganda urgently needs the oil funds to expeditiously develop her infrastructure.
“You should not cause the NRM government to be paralyzed in that area or in any other area. We need the oil money to develop our infrastructure”, he emphasized.
The President was this afternoon addressing Members of the August House and the Nation on the oil production agreements the government signed recently with Tullow Oil Exploration Company as well as the management of the oil resources.
He explained that the longer the delays went on, the more the oil companies would incur more expenses, especially on the wages of their employees when no work is being done.
President Museveni further pointed out that Uganda could not afford to repeat the same mistakes made on security and electricity where the army was underfunded and the construction of Bujagali hydro-power station delayed for over 6 years. He said the mistake of underfunding the army was solved by cutting the budget from all Ministries for acquisition of modern weapons that dealt a decisive blow to the retrogressive forces like that of Kony. He added that by setting up the energy fund in 2006, the mistake of electricity is being addressed. President Museveni informed the House that the first 50 MW turbines at Bujagali, has been commissioned and the remaining 4 will be ready by July 2012. He assured the nation that there will be no load shedding after that.
The President, however, cautioned that the situation would only take 3 years as the economy grows and urged for urgent construction of more hydro power dams to avoid any future power shortages.
President Museveni, who earlier told the legislators the genesis of the oil exploration by NRM government dating back to 1986, said great care and caution had to be taken as the country stood to lose a lot of resources if the agreements were hastily signed.
He said the government had to train Ugandan scientists who took up the task of exploring and discovering oil in the Albertine Basin (Mwitanzingye) and other areas. He added that Ugandan officials had reached agreements with oil companies regarding the Production Sharing Agreements PSAs and added that the recently concluded agreements are favorable and were mutually agreed upon by both the government and the oil companies saying that they are far much better than those agreed upon in 2001.
He explained that in 2001, the accords reached stipulated that before the oil company recovers its exploration and drilling costs, for every 100 barrels of oil produced, they will take 74 barrels and the government will have 26 and after the recovery of the costs, the companies will take 42 barrels out of 100 and the government will take the rest. He said this will not include taxes which are 30% of barrels taken by the company and also excludes royalties and capital gains tax.
He stressed that an oil refinery will be built in Uganda and a pipe line may be considered if the economics are right.
On the management of the oil resource, President Museveni told Members of Parliament that the funds will not be used for the purchase of consumables but for building durable infrastructure like developing cheap electricity, human resource development, roads, railway lines and supporting scientific research and innovations in government universities and the Uganda Industrial Research Institute as well as in National Agricultural Research Organization (NARO). He said in the long run, Uganda will also develop nuclear energy using the abundant uranium which he directed not to be exported. President Museveni said other areas to benefit from the oil funds include developing irrigation schemes in various parts of the country.
The President also briefed the House on steps to be taken to contain corruption and the environment.
He, therefore, called on all Ugandans, especially NRM leaders, supporters to work together and take advantage of the new factors and become pioneers in the process of transforming Uganda into a middle income country in the next few years.
