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Article

18 Jan 2010

Author:
Taimour Lay, in Guardian [UK]

Uganda oil contracts give little cause for optimism

...[T]he exploration and imminent production of oil in western Uganda is being seen as...an easy answer to complex problems. Both government and the oil companies involved have been busy painting a roseate picture of bumper revenues and a country transformed....Uganda, we are told, will be turned into a middle-income country by $2bn a year in hard cash. But the problems facing Uganda...are almost certain to be exacerbated rather than solved by oil. Last month, the campaigning group PLATFORM published three of the production sharing agreements (PSAs) the government has spent years keeping a closely guarded secret. The deals point towards a resource extraction programme designed for profit, not development, and contain a series of provisions that undermine any hope of changing course...The 20-year contracts, consistently weak or completely silent on human rights protection, also include a sweeping "stabilisation clause" - article 19 requires the Ugandan government to compensate the companies for any future change in the law that affects their profits - designed to militate against improvements in environmental standards. [refers to Tullow Oil, Royal Bank of Scotland, Heritage Oil]