A Critical Analysis of the Petroleum (Exploration, Development and Production) Act 2013 And Its Impact On the Oil Industry in Uganda

ABSTRACT The PEDP Act 2013, raises legal issues which had to be resolved in order to understand its impact on the upstream sector of Uganda's oil industry. State participation, in the PEDP Act 2013, is only limited to 20% carried interest which is low when compared to Algeria at 51% carried interest, Cameroon at 50% carried interest, Nigeria at 50+% carried interest and Norway at 20-56% WI. This requires a review of section 124 PEDP Act 2013. Corporate governance will also be a daunting task given the fact that the regulator PAU has to receive directions from the Minister of Energy and Mineral Development as provided for under Section 13 and 14 of the PEDP Act 2013. This will compromise the independence of the oil regulator. Oil revenue sharing is mandatory as provided under section !54 PEDP Act 2013 where a licensee has to pay royalties to GOU in addition to annual fees and a signature bonus given under Section !55 PEDP Act. Late payments attract a 5% surcharge. Executive oversight as provided for under Sections 4,5,6 and PEDP Act 2013, is likely to negatively interfere with the oil industry if the terms of reference are not clearly defined. Local content is assured by Section 125 PEDP Act 2013 although the law does not categorically state local content quotas and thus subject to abuse. Sustainable development is at the heart of the PEPD Act 2013 and Section 1(a) ensures that oil activities are carried out in a sustainable manner to avoid environmental degradation by complying with environmental principles as provided for under Section 3(1) PEPD Act 2013. Occupational Health and Safety, is guaranteed by Section 140 (1), 140 (2), 141(a), 142, 143(1), 144, 145 and 147 PEDP Act 2013, to ensure a safe and healthy working environment. Criminal and civil liability is sufficiently provided for though not adequate. For instance an individual who carries out illegal oil activities is only fined shs.2billion and a body corporate is only fined shs.20billion of the PEDP Act 2013, yet such activities can derail the entire oils industry. In sum, the PEDP Act provisions are rather sufficient but not adequate.