The Observer (Kampala)

Uganda: Oil - Museveni Attacks MPs, NGOs

President Yoweri Museveni vowed to resist any foreign interference in Uganda's oil sector. ( Resource: Uganda Focuses On Oil and Gas

As Opposition MPs boycott House:

Buoyed by the passage of the highly controversial Petroleum (Exploration, Development and Production) Bill 2012 last week, President Museveni today sharply criticized MPs and civil society organizations that rallied to defeat the bill.

In a speech to Parliament, Museveni said the opposing MPs and CSOs were used by some foreign organizations to sabotage the country's nascent oil industry. The controversial Clause 9 of the bill gives discretionary powers to the minister of Energy and Mineral Development to grant and revoke oil licenses. Critics wanted such powers vested in the Petroleum Authority.

Addressing Parliament, a week after the controversial bill got the much needed parliamentary approval; Museveni said he was ready to fight these groups by all means.

"...The [Theodore] Ssekikubos and [Wilfred] Niwagaba and their allies will be stopped. To stand here and use Parliament, which was created with the blood of NRM is to insult the historic achievements of the patriots," Museveni said, referring to the Lwemiyaga and Ndorwa East MPs, outspoken opponents of clause 9. Both MPs were in the House and whenever their names were mentioned, they would smile, shyly.

Museveni also accused some civil society organizations, notably the Advocates Coalition for Development and Environment (ACODE) and the Africa Institute for Energy Governance (AFIEGO), of bribing MPs to oppose government's position on the bill. Prime Minister Amama Mbabazi claimed last week that the opposing MPs got $700,000 (Shs 1.85bn) to frustrate the oil bill.

"I have written to the IGG. I want her to investigate the source of this money. At one workshop in Munyonyo I was told that ACODE paid each MP Shs 1m and spent a total of Shs 1.5bn. Where did they get this money?" Museveni said.

Museveni also attacked Zac Niringiye, the former assistant bishop of Kampala diocese for opposing the bill yet he did nothing to oppose misrule in the past.

"Niringiye is 65 years; so he was old enough when Idi Amin was terrorizing Ugandans. What did he do? Now he is making noise over something he does not know," Museveni said as some MPs, who respect the religious leader, shifted uneasily in their seats.

He said some MPs and NGOs had wrongly opposed the ministerial powers over oil licences. He said the minister would still work with some technocrats before taking any decision. Museveni said it was vital for the executive to have a major say in the oil industry because the process of awarding licences is very political.

He, for instance revealed that government had declined to give Eni, an Italian firm an exploration licence and instead gave it to CNOOC, a Chinese firm after realising that Uganda would benefit more, politically, by dealing with the Chinese than Italians.

"If you [oil firm] do not do what I told you to do I cancel the licence. Revoking the licence is a form of disciplining because I am not going to punish oil companies through canes," he said.

Museveni said Uganda would avoid some of the pitfalls that have befallen other African oil-producing countries. He said the country had negotiated for a 70% share of all revenues in the oil Production Sharing Agreements (PSAs) signed with exploration firms, unlike other countries like Mauritius which he said are getting only 45%.

Curse?

Museveni also defended the decision to construct a costly oil refinery saying exporting crude oil was a more expensive option. Exporting crude would require construction of a pipeline to Mombasa (for it to be refined) and given that the oil is waxy, it would require a lot of energy to heat the pipeline.

He added that the oil would also attract transit charges of $40 per barrel , making it a very expensive option. With a refinery, Uganda would be able to produce a wide range of oil products while avoiding fuel shortages that regularly afflict some oil producing countries.

Museveni caused laughter when he said oil revenues would not be spent on "whisky, perfumes and artificial bums" like some countries had done but would be invested in projects to benefit future generations. Museveni's speech was well received by the NRM dominated House. Some MPs who, weeks earlier, had opposed clause 9 of the bill, were seen severally stamping and cheering the president.

However, many opposition MPs boycotted the address. Only a few, like Jimmy Akena (UPC), Maxwell Akora (UPC) and, briefly, Kassiano Wadri (Terego), attended. Shortly before the address, Latif Sebaggala, the MP for Kawempe North, told The Observer that he had more useful things to do than to listen to Museveni's speech.

"What is he going to say that is new apart from abusing people?" Sebaggala said.

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