The PSA signings paved way for Tullow to complete its farm-down to Total and CNOOC valued at US$2.9 billion.
Observers see the latest deal in a sector shrouded in secrecy, without a legal framework, and hanging on the whims and decisions of one man, President Yoweri Museveni, as harbinger of doom in the country’s nascent oil sector.
The new transaction has kicked off a row between the legislature and the cabinet worsening a situation that is already explosive. The MPs who have previously accused the cabinet of undermining their scrutiny role have decried the new PSAs and interpreted the new signings as contempt of parliament.
They say they are going to censure the Energy minister Muloni, over the new PSAs and take the government to court unless it recalls the agreements.
“This is contempt of parliament, we received the news with great consternation and we will challenge the agreements in courts of law,” Gerald Karuhanga the Youth MP Western who tabled the bribery allegations against Tullow in parliament told The Independent, the night the fresh PSAs with Tullow were announced.
“But I pity Tullow; you disregard the legislature, judiciary and go ahead to sign fresh contracts, where will you go when things go wrong?
“Governments come, government’s go, so signing oil contracts contrary to the interests of Ugandans is suicidal as these contracts can be nullified anytime,” Karuhunga said.
Another youthful MP, Vincent Kyamadidi, who represents Rwampara also said that the decision to sign fresh PSAs makes the executives intentions questionable. “Why rush into signing new agreements after a court injunction that nothing about oil be discussed until a petition has been disposed of?”
Legal experts have also weighed in. According to Nicholas Opiyo, top Kampala advocate the government’s decision to sign fresh contracts in face of resistance, a court injunction and refusal to wait for the parliament’s recommendations foretells ill-motive.