Kenj Nabirye

Kenj Nabirye

New NRGI Index Says 66 Countries Struggling With Governance Of Oil, Gas And Mining Sectors

The majority of governments inadequately govern their oil, gas and mining sectors, according to the 2017 Resource Governance Index. Sixty-six countries were found to be weak, poor or failing in their governance of extractive industries. Less than 20 percent of the 81 countries assessed achieved good or satisfactory overall ratings. 

The cross-country study of extractives governance, released Wednesday by the Natural Resource Governance Institute (NRGI), is the most comprehensive of its kind to date. It is based on new research into how countries’ governance affects their potential to realize value and manage revenues from their resources.

 It also incorporates existing assessments of countries’ “enabling environments”—a measure of how well citizens can access and use information, freely work together to voice their concerns and hold their governments to account, and of the quality of institutions in the areas of administration, rule of law and corruption control.

Index data show that Norway exhibits the best governance of natural resources, followed closely by Chile, the United Kingdom and Canada in the top-most “good” performance category. Eritrea exhibits the worst resource governance and receives a failing grade in the index, with Turkmenistan, Libya, Sudan and Equatorial Guinea among others also rated failing.

Some middle-income countries—such as Colombia, Indonesia, Ghana, Mongolia, Peru, Mexico and Botswana—achieve good or satisfactory overall ratings. Burkina Faso places highest among the low-income countries studied; its mining sector ranks 20th overall.

“Good governance of extractive industries is a fundamental step out of poverty for the 1.8 billion poor citizens living in the 81 countries we assessed in the Resource Governance Index,” said Daniel Kaufmann, NRGI president and CEO. “It is encouraging that dozens of countries are adopting extractives laws and regulations, but often these are not matched by meaningful action in practice.”

The gap between law and practice is larger in countries where corruption is systemic, the index found. This gap occurs in many policy areas of extractive industries—including environmental and social impacts, and the sharing of resource revenues by national governments with local authorities—and is particularly problematic for communities living near extraction sites.

The index also assesses the governance and transparency of sovereign wealth funds in 33 countries. Colombia’s Savings and Stabilization Fund is the best-governed of the assessed funds, followed by the Ghana Stabilization Fund.

The Qatar Investment Authority, with USD 330 billion in assets, and Nigeria’s Excess Crude Account were found to be the worst-governed funds. At least $1.5 trillion is currently managed by the 11 sovereign wealth funds NRGI researchers rated as failing.

Chile’s Codelco state mining company was listed as the best-governed of 74 extractive sector state-owned enterprises that were assessed for their disclosures and corporate governance. The Oil and Natural Gas Corporation of India came second. Forty-eight countries’ state-owned companies received unsatisfactory ratings.

The index identifies weak governance in the China National Petroleum Company, and finds failing governance in the Abu Dhabi National Oil Company, the Gabon Oil Company, Turkmengas and Saudi Aramco.

“The Resource Governance Index shows us that if they are to contribute to their countries’ development, state-owned enterprises require serious reform,” said Ernesto Zedillo, former president of Mexico and chair of NRGI’s board of directors. “Buteffective governance of the oil, gas and mining sectors is not an insurmountable challenge—the index provides many examples of developing countries defying expectations and stereotypes.”

In recommendations released with the data, NRGI calls upon governments to support key transparency measures (including compliance with open data standards) and for them to adopt and implement laws requiring the disclosure of the identities of the true beneficiaries of oil and mining companies.

NRGI also calls for a reversal of the trend toward closing civic space in many resource-rich countries. “Where freedoms of citizens and journalists are under attack, governance of the extractives sector is fundamentally impaired,” said Kaufmann. “Access to information on contracts, revenues, state companies and sovereign wealth funds is only valuable when citizens can hold authorities and companies to account.”

Bunyoro King Encourages Youth To Study

The people of Bunyoro should send their children to school so that the kingdom can get experts to work in the burgeoning oil and gas sector, the King of Bunyoro Kitara Kingdom, His Highness, Solomon Gaffabusa Iguru, told his ministers at a meeting this week.

The message was also directed at the kingdom’s youths who according to the King have a right to study. Speaking at the closing ceremony of a two day retreat meeting at Adonia Hotel in Buliisa Town on Tuesday, the King said with education the kingdom will experience development and innovation.

” I call on all the people of Bunyoro to send children to school. Bunyoro need experts in oil production and agriculture” the King said. He warned youths against engaging in behaviors that put their lives in danger. He encouraged youths not to contract HIV/AIDS and abuse of drugs.

Bunyoro is home to over 6.5billion barrels of crude oil which awaits extraction. Government of Uganda will this year license more oil companies to undertake oil exploration in acreages located in Bunyoro. Ever since oil was discovered in 2006, Bunyoro became an important part of Uganda.

The King has been vocal in ensuring that his subjects directly and indirectly benefit from the natural resource. He has specifically lobbied for jobs for his youths. The Kingdom has also demanded for a high rate of loyalties from oil.

 

 

Victoria University Starts Short Oil And Gas Courses

The Victoria University Oil and Gas Department has announced that short course training in oil and gas management will be held starting from 27th August 2016. Registration for the general public is ongoing for our August intake, the Jinja Road based University said in a statement.

Training is conducted by professionals working in the oil and gas industry and other consultants practicing along the oil and gas value chain. This programme targets professionals who are working in the oil and gas industry and those working for organizations and sectors whose businesses support the oil and gas industry.

The programme includes an oil and gas education tour of the Oil Fields in the Albertine Graben (Hoima and Buliisa Oil Fields). The training program equips delegates with skills and knowledge to start a rewarding career in the oil and gas industry. On successful completion, delegates are awarded the Certificate of Achievement in Oil and Gas Management.

The fees for the programme are Uganda Shs1, 400,000 (One million four hundred thousand). Foreign applicants shall pay Uganda Shs1, 500,000 (One million five hundred thousand) including a field trip. The fees include training fees and fees for the field trip.

In an exclusive interview with Earthfinds in February this year, Victoria University Vice Chancellor Dr. Stephen Robert Isabalija said they would add more oil and gas related course. And these short courses which will be seven weekends’ long come as a partial fulfilment to the vice chancellor promise.

Uganda Invites Four Oil Companies To Negotiate Production Sharing Agreements

The Ministry of Energy and Mineral Development has invited four foreign oil companies to negotiate Production Sharing Agreements (PSAs) in Uganda’s first competitive licensing round. The ministry said it has completed evaluation of bids submitted by over ten oil companies and is ready to negotiate with successful companies.

The successful companies are Armour Energy Limited of Australia for the Kanywataba Block, to negotiate Production Sharing Agreements (PSAs), WalterSmithPetroman Oil Limited of Nigeria, for the Shallow and Deep Plays in the Turaco area, Oranto Petroleum International Ltd of Nigeria for the Shallow and Deep Plays in the Ngassa area and Niger Delta Petroleum Resources Ltd of Nigeria for the Shallow and Deep Plays in the Ngassa area.

In a press statement released on Monday, the energy ministry said government of Uganda will negotiate five PSAs with these companies and issue five exploration licenses, upon successful negotiation. The five PSAs are one for the Kanywataba block and two for the shallow and deep plays of the Turaco and Ngassa blocks respectively. 

Negotiations for the five PSAs will commence during the first week of August 2016 and are expected to be concluded during the month. Ernest Rubondo, Director for Petroleum in the Ministry of Energy & Mineral Development (MEMD), is quoted in the statement saying that negotiations for these PSAs is the final milestone before granting exploration rights over these areas. 

The key aspects to be discussed during the negotiations will include the respective work programmes, National Content and the fiscal aspects like Royalty which were biddable. Further due diligence will be undertaken on the successful bidders with regard to their financial, technical and Health, Safety and Environment management capabilities prior to the issuance of licenses.

Rubondo added that the investments and activities arising out of the exploration work under these new exploration licences are expected to come at the same time as the investments and activities of developing the already discovered oil fields in the country and those for constructing the infrastructure for commercialization which include a refinery and an export pipeline.

These multiple activities will lead to a significant increase in investment in Uganda’s oil and gas sector and an increase in its knock-on effect on the other sectors of the economy. Uganda’s first licensing round is being undertaken in line with the National Oil and Gas Policy for Uganda (2008) and in accordance with the Petroleum (Exploration, Development and Production) Act 2013.

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