UCMP ask govt to issue Tullow, Total licences

Elly Karuhanga, chairman Uganda Chamber of Mines and Petroleum

The Uganda Chamber of Mines and Petroleum, an association of private players involved in the extractives industry, wants government to expedite the insurance of production licenses to two oil companies - a process, it says, “will result into increased business opportunities in the country.”

Releasing a statement after government had announced the preferred bidder for the country’s refinery, Elly Karuhanga, the chairman of the chamber, said:
“Whereas news on the refinery is very exciting, we call upon the government of Uganda to apply similar decisiveness on the other lacunas in the oil and gas and mining industries, especially the issue concerning the issuance of production licenses to Total E&P and Tullow Plc, and the scrapping of taxation on exploration projects.”
For more than a year, Total and Tullow have been engaged in negotiations over the issue of production licenses. The two companies submitted requests for productions on at least six wells. Only Chinese firm Cnooc received a production license in 2013 for the Kingfisher field.
The upstream oil companies also continue to hold discussions over the taxes on equipment for exploration. While the companies desire a scrapping of some taxes, government sees these taxes as a crucial source of revenue. The impasse over these two issues is partly responsible as to why business in the oil industry has slowed down.
Karuhanga also encouraged government to announce the next round of licensing for oil blocks as quickly soon as possible in order to attract more investors in the industry. It is estimated that 60 per cent of the oil-rich Albertine graben is not explored.
The UCMP commended government for passing the laws and regulations that govern the industry, and said it awaited the establishment of the National Oil Company and the National Oil Authority.



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