Bloomberg News

Uganda Forms Committee to Probe Oil-Industry Irregularities

October 27, 2011

(Updates with name of chairman in second paragraph.)

Oct. 27 (Bloomberg) -- Uganda’s parliament formed an ad hoc committee to investigate claims of irregularities in the oil industry, including allegations that three ministers took bribes to endorse deals, said Speaker Rebecca Kadaga.

The seven-member committee, chaired by ex-minister Michael Werikhe, is expected to take three months to complete its probe, Kadaga said in a televised debate today in Kampala, the capital.

Ugandan lawmakers voted on Oct. 11 to probe Prime Minister Amama Mbabazi, Foreign Affairs Minister Sam Kutesa and Internal Affairs Minister Hillary Onek for allegedly taking bribes to endorse oil deals. The three ministers denied the allegation during a parliamentary debate on the same day.

Lawmakers also two weeks ago voted to halt any further oil transactions, including the approval of the $2.9 billion sale by Tullow Oil Plc of interests in three oil blocks to Total SA and China National Offshore Oil Corp., until “necessary laws” are instituted.

Tullow sold stakes in three oil blocks to Total and Cnooc on March 30 as part of its development of Uganda’s Lake Albert Basin. Under the deal, Tullow is to retain a third interest in the three sites, with Total and Cnooc being equal partners, Tullow said on March 30.

 Tullow discovered commercially viable oil deposits in the Lake Albert basin in 2006. Uganda has an estimated 2.5 billion barrels of oil, with more than 1 billion already discovered, according to the London-listed explorer.

--Editors: Emily Bowers, Alastair Reed.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net


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