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Oil Curse! How Ex-Minister Bbumba Cost Uganda Shs570bn

On Tuesday, Sydah Bbumba, who was the Minister of Energy and Minerals from 2002 to 2006 admitted that she signed Production Sharing Agreements without thoroughly reading through the documents of the deal that cost Uganda US$157M (over Shs570bn)

Bbumba who had appeared before the Parliamentary Committee of Commissions, State Enterprise and Statutory Authority (COSASE) to defend herself over the controversial deal, said that she banked her decision on the advice of the Solicitor General to sign the deal.

“Article 119(4) of the Ugandan Constitution stipulates that the Attorney General is the legal advisor of government. I was advised by the most competent people in the sector, I wasn’t an oil expert,” Bbumba, looking disgraced, said. In the documents signed, Bbumba granted a tax waiver of US$157m to Tullow Oil.

Her defence left the lawmakers almost speechless, with many wondering why a senior minister couldn’t get time to thoroughly read documents before inking the deal.

It was during Bbumba’s quizzing that fresh details on how Tullow Uganda Limited and Tullow Uganda Operations Pty Limited reached agreement with CNOOC and Total-with Uganda Revenue Authority on the watch.

According to available documents, Tullow Uganda Limited and Tullow Uganda Operations Pty Limited were to pay US$2.93bn and US$475.9m on October18, 2010

However, the Tullow firms didn’t honour their obligations as agreed, forcing URA to revise their tax assessment on February24, 2011 to US$ 467.2m.

However, after engagements with the said firms, URA on March15, 2011 agreed to cut the second assessment by 30%, thus Tullow would pay US$141.8m.

However, with intent to make a killing from Uganda, on March25, 2011 Tullow filed an application to have the new assessment reviewed by the Tax Appeals Tribunal.

Eventually, Tullow lost the case in the Tax Appeals Tribunal and ordered Tullow to pay US$407m.

However, Tullow wasn’t convinced and went to the High Court, but before Court could play its role, URA-for unknown reasons, entered into a consent judgment with Tullow- upholding the US$407m as ruled by the Tax Appeals Tribunal.

But Tullow paid less since in the documents signed hastily Bbumba had granted them a tax waiver amounting to US$157m.

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