UNOC is a government company incorporated in June 2015 to handle the government’s commercial interests in the petroleum sub-sector and ensure state participation in petroleum activities. The company is also mandated to investigate and propose new upstream, midstream, and downstream ventures locally and internationally.
The government has tabled fresh amendments to the Public Finance
Management Act, to allow the Uganda National Oil
Company (UNOC) access proceeds from the sale of its interest in crude oil.
UNOC is a government company incorporated in June 2015 to handle the government’s commercial interests in the petroleum sub-sector and ensure state participation in petroleum activities. The company is also
mandated to investigate and propose new upstream, midstream, and downstream
ventures locally and internationally.
The government is now seeking to empower UNOC to meet financial obligations arising from applicable Production Sharing
Agreements and Joint Operating Agreements in each year, based on an approved
Work Program and Budgets for the calendar year.
The amendments will also enable the government to meet obligations borne by Uganda National
Oil Company on its own behalf as well as the State as provided for in the relevant
contractual agreements, including the Host Government Agreement, the Tariff and
Transportation Agreement and applicable laws.
“UNOC is required to deposit the proceeds retained after
expending money for the two into the Petroleum Fund. Part of these proceeds
may then be appropriated by Parliament to fund approved investments of the
Uganda National Oil Company,” reads part of the Bill.
The Bill was read for the first time by Amos Lugoloobi, the Minister
of State for Planning in the Tuesday afternoon plenary sitting chaired by
Deputy Speaker, Anita Among.
//Cue in; “right honourable Speaker…
Cue out…27 of 2021.”//
Under the existing law, Section 56 establishes the Petroleum
Fund into which all petroleum revenues which accrue to the government must be paid.
This implies that all proceeds, including those arising from the sale of the
State Participation, should be paid directly into the Petroleum Fund.
“The Act, therefore, does not provide for a mechanism by which
the obligations of UNOC as a licensee under the Production Sharing Agreement
(PSA) and Joint Operating Agreement (JOA) are met in a manner consistent with
the key contractual provisions, including cost recovery, under the Production
Sharing Agreements and Joint Operating Agreements,” further reads the Bill.
The Bill further reads that the existing Act does not
provide for the payment of tariff obligations under the Host Government
Agreement (HGA) and Transportation and Tariff Agreement (TTA), before net
proceeds can be deposited into the Petroleum Fund.
Deputy Speaker Anita Among referred the Bill to Parliament’s
Finance Committee for consideration and report back to the House within 45