Tullow accused of acts of bribery in Uganda

 

An Irish firm is alleged to have paid a politician for oil field concessions, writes JODY CLARKEin Kampala

THREE SENIOR Ugandan politicians appeared before the country’s high court yesterday on corruption charges, in the latest scandal that also saw Irish company Tullow Oil accused in parliament of bribing one of the accused.

Foreign minister Sam Kutesa, junior labour minister Mwesigwa Rukutana and chief whip John Nasasira, who all resigned on Wednesday, were accused of misusing funds meant for hosting the 2007 Commonwealth summit.

The case comes two days after the Ugandan parliament called for Mr Kutesa, as well as the country’s prime minister, Amama Mbabazi, and internal affairs minister Hilary Onek, to step down while it investigated allegations that the Anglo-Irish oil company Tullow Oil paid millions of dollars in bribes to them and other officials in exchange for concessions in the East African nation’s oil fields.

MPs alleged that between June 1st and July 16th, 2010, Tullow paid up to $100 million to “expert” bureaucrats, among them the three ministers.

In documents tabled before parliament by Gerald Karuhanga MP, it was alleged that Tullow’s former country manager, Brian Glover, wired the money from the company’s accounts with Bank of Valetta in Malta.

Tullow Oil has denied the allegations. In a letter to the Ugandan parliament, Tullow’s chief executive, Aidan Heavey, wrote that he “rejects the outrageous and defamatory accusations of corruption” against the company.

Making clear its dismay at the accusations against it, Tullow said it looked forward to clearing its name before a commission of inquiry into the bribery allegations, which was allowed for in the motion tabled before MPs.

However, Mr Karuhanga, a former student leader, said he was willing to repeat the claims outside parliament.

“I am ready to die for telling the truth”, he said, but would not expand when contacted by The Irish Timeslast night.

The country’s president, Yoweri Museveni, also rejected the claims, decrying the documents as “forgeries” and rejecting accusations that he took bribes from the Italian oil firm ENI in the sale of Tullow Oil shares.

“I have never been given any money by anybody,” he said. “Did I receive money from ENI? I am the one who stopped them . . . In fact I chose the Chinese,” he said, referring to the eventual deal which the Chinese state oil firm Cnooc won.

Earlier this year, Mr Museveni appointed a team of investigators to look into the documents Mr Karuhanga received after Andrew Mwenda, a Ugandan political analyst and prominent critic of the government, passed them on.

They found that they were forgeries.

“When I first saw these documents I thought they were forgeries but I was not convinced. So I passed them on to the Nation Media Group in Kenya before I gave them to the president,” he told The Irish Times.“They came to the same conclusion.”

Asked why someone would forge documents accusing the government of being implicated in corruption in the oil industry, he said it looked like a useful means of directing anger against Mr Museveni, who has been in power since 1986.

“Kutesa is a poster child for corruption in Uganda,” said Mr Mwenda. “People perceive him to be very corrupt so if you accuse him of sleaze, it is a good way of directing mass hysteria against the government.”

However, he welcomed the move by MPs to delay any further oil deals, as the Ugandan public was still not aware of the full content of contracts signed with oil firms. “I think there is an overriding right of the public to see . . . what is being adhered to.”

The full content of oil deals signed between the Ugandan government and international oil companies has not been made public, prompting MPs to vote for delaying Tullow’s $2.9 billion sale of one-third of its holdings in Uganda to France’s Total SA and China’s Cnooc until all the necessary oil laws were in place. The deal was supposed to clear the way for a $10 billion refinery in the country’s oil-rich Lake Albert Region in the west.

Uganda is poised to earn $3-4 billion annually once it starts pumping oil, of which 2.5 billion barrels has so far been discovered.

Some 64 wells are in operation, of which 59 are productive.

While the companies recover their initial investment, they are expected to get 63.5 per cent of the revenues while Uganda takes 36.5 per cent.

Upon full cost recovery, the Ugandan government’s share of the revenue will increase to 72.6-80.5 per cent.

AFRICA'S 'LEADING INDEPENDENT OIL COMPANY': FROM SMALL BEGINNINGS TO MAJOR PLAYER STATUS

TULLOW OIL is one of Ireland’s most successful companies and styles itself as “Africa’s leading independent oil company”.

The company’s founder and chief executive, Aidan Heavey, describes its founding thus:

“It started in a small town called Tullow, about 35 miles south of Dublin, Ireland. In the ’80s there were loads of companies starting off in the North Sea and Irish Celtic Sea. I was talking to a friend of mine in the bank one day and he was talking about small oil fields in Africa, which had been left behind by the majors and had no one to work them.

“That is where the idea came from. I contacted another friend of mine in the World Bank who told me about a project in Senegal. They had some small gas fields that they were trying to get people to develop, so I set up Tullow Oil to rework those old fields.

“I knew nothing about the oil and gas industry at the time, which made it more challenging. No one thought Tullow would succeed because of my lack of knowledge of the industry, no major backers and I was starting a company in a country with no oil industry.”

From modest beginnings, the company is now firmly established as a player. Following the signing of a licence agreement in Senegal in 1986, gas production and sales started in 1987. Soon, it was operating in eight countries with 42 employees.

By last year, it was operating in 22 countries, had 935 employees, $1.0898 billion (€795 million) in revenue and an operating profit of $234.6 million.

The company’s website, tullowoil.com, urges all employees to act ethically, guided by good judgment and common sense. It says: “Each one of us is personally responsible for ensuring that our day-to-day business activities are conducted in a fair, honest and ethical manner. While everyone is responsible for ensuring an ethical workplace, leaders assume additional responsibility for fostering the proper environment, and encouraging ethical practices.”