{UAH} Bad oil deal
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Bad oil deal
Museveni fight with oil firms threatens major project
Kampala, Uganda | HAGGAI MATSIKO | President Yoweri Museveni's dream of Uganda getting first oil by 2020 has been hit by a double blow from two international oil companies; Total E&P Uganda and Tullow Oil Uganda.
Museveni is battling the two companies on two fronts; with Total over the fate of the US$3.35 billion oil pipeline and with Tullow over Capital Gains Tax (CGT) which Tullow does not allegedly – once again- want to pay.
The two disputes mean that the date of first oil production is once again pushed farther; this time from 2020 to 2025, according to insider estimates.
By that time Museveni will be 81 years old, with an election looming in 2026, and no clear guarantee that he will preside over the first production of Uganda's oil.
Is that what the oil companies, and their shareholders and backers in western capitals want?
Museveni has gained few friends among the oil companies because of his insistence that Uganda builds an oil refinery in order to benefit from the by-products of the oil production. He has also insisted on a tough Capital Gains Tax regime. Equally significantly, corruption and lethargic decision-making by his government have slowed progress on oil projects.
On the other side, the oil companies want a faster clear cut produce-and-export crude approach, and might opt to wait out Museveni – and deal with his successor.
"Tullow is out and Total is hard-lining because it has the financial muscle to wait out Museveni," one source familiar with the disputes told The Independent.
According to some observers, this could explain the endless disputes and deadline delays.
In the latest case, deals worth $ 20 billion are at stake. The issues are so critical that Museveni and his teams of oil sector technocrats have been
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