While government paid Shs57 billion to a United States based Oil Company, Albatros as an out of court settlement, there was a benefit of 10 hectares of land, according to the Permanent Secretary, Ministry of Energy and Mineral Development, Irene Bateebe.
The funds were expended under the supplementary budget of 2022/2023 following cancellation of the agreement between government and Albatross.
In 2014/2015, government entered an implementation agreement with Albatros to establish a 50 megawatt thermal power plant in Hoima district, but the production of oil and development of the oil refinery delayed.
Subsequently, government and Albatros mutually agreed to discontinue the project and reimburse the developer for expenses incurred in the development of the project process, retain the land and other assets of project.
Bateebe told the Committee on Natural Resources on Thursday, 09 March 2023 that the land in Hoima district is now government property and it will be utilized, accordingly.
“As a ministry, we have a lot of activities ongoing and we are looking at how to put that land to use,” said Bateebe.
The Minister of Energy, Hon. Ruth Nankabirwa explained that the out of court settlement was aimed at saving government from losing more than Shs57 billion.
“Albatross would have asked for anticipated profits and revenue and this would push us to further negotiations, and the more time you take, the more money you pay,” said Nankabirwa.
Hon. Frederick Angura (NRM, Tororo South County) however, said that the agreement with the company was an indictment on the country, well aware that oil production takes a long process.
“Imagine this commitment was made in 2010 in anticipation that we shall have oil flowing today and still we have not seen any oil. We are losing this money because of people who planned well that we shall not succeed by that time. Someone should be held responsible for this,” said Angura.
Meanwhile, the Petroleum Authority Uganda (PAU) justified expenditure of a supplementary of Shs11 billion.
The Director Finance and Corporate Services, Michael Oyonga said that the funds are expected to carry out petroleum regulation and monitoring, petroleum exploration and development and economic and national content monitoring.
According to Oyonga, Shs177.9 billion will be used to perform national content compliance.
“This fund is required to carry out national audit to ensure that Ugandans and the Ugandan companies are benefiting from the national content policy. No funds were provided in the budget of this financial year for this activity,” he said.
