Tullow Oil response to concerns about its project in Uganda: including contract transparency and compensation process

Business & Human Rights Resource Centre invited Tullow Oil to respond to the following item:

“Uganda: Country Ready for Oil Riches Amid Corruption Fears”, Michelle Faul, Associated Press, 20 Feb 2012

Tullow Oil sent this response:

23 Feb 2012

1.  The contracts signed with government are confidential. Tullow would happily make the contracts public (as we have, for example, in Ghana) however, this is a matter for the Government of Uganda who, for reasons of commercial confidentiality, have decided to keep the terms of the contracts secret. That said, the President of Uganda detailed most of the headline terms in a speech in the Ugandan parliament on 9th February. It is Tullow’s belief that these production sharing agreements are very generous and are in-line with industry best practice.

2.  Tullow has not agreed that the crude oil should not be exported. The President has invited Tullow and its Partners to make an economic case for an export pipeline and we will happily do so.

3.  The quote from Kate Lehane is accurate – it was for the Government of Uganda to decide the timing of the deal. Tullow is a contractor to the Government of Uganda and they dictated the timing.

4.  Re: compensation: Michelle Faul was told several times that Tullow neither sets the rate or the timetable for the payment of compensation. Rates of compensation and the timetable for payment are both set by local administrators and not by Tullow. We have paid out 38,000 claims and I can assure that the total bill, while confidential, is substantial.

5.  The Parliamentary Enquiry has now been re-started and Tullow expects to be called in front of it. We look forward to appearing and presenting our case.

6.  In October 2011, Tullow was accused in the Ugandan Parliament of paying bribes to three senior government ministers. As was stated at the time in a letter to the Speaker of the Ugandan Parliament from Aidan Heavey, our CEO, these allegations were false and based on crude forgeries. This rebuttal by Tullow was repeated in the Ugandan media and on the BBC World Service. Tullow is able to prove demonstrably that the documents on which the allegations were made were forged and that the Company’s findings have corroborated by the UK’s Serious Fraud Office, the Metropolitan Police in London and the relevant authorities in Uganda and Malta, where the payments were allegedly made. We will make all these documents public when we appear in front of the Ugandan Parliamentary Committee.