MPs push for investor-friendly oil exploration law

Lawmakers have called for investor-friendly laws on petroleum to be enacted as government plans to draft more regulations to deliver on oil prospects.

Lawmakers have called for investor-friendly laws on petroleum to be enacted as government plans to draft more regulations to deliver on oil prospects.

Under the Petroleum Exploration and Production Bill, tabled before the House in June by State Minister for Minerals Evode Imena, the government seeks to have all legal instruments in place before exploration, extraction and production works, should the feasibility studies confirm mass reserves of crude oil.

If the Bill is enacted into law, it will provide a regulatory framework for the development and management of upstream petroleum activities, if the reserves are in big quantity and commercially viable.

Debating the Bill on Tuesday, lawmakers noted that exploration activities are costly, suggesting that only big companies will venture into the projects.

According to MP Suzanne Mukayijore, the deputy chairperson of the parliamentary Standing Committee on Aagriculture, Livestock and Environment, the law should be clear in terms of how government negotiates with willing investors prior to commencement of the oil exploration.

“Clauses on guarantee and securities should be addressed to avoid time and resource wastage for willing investors and that is where the Bill deserves more scrutiny,” Mukayijore said.

Minister Imena assured the lawmakers that the draft legislation is investor-friendly and that it has been heavily informed by other laws on oil already in place in regional countries that have discovered petroleum before.

“We need to ensure that the law is favourable to an investor although as government we also need to ensure regulations are in place and in the interest of the state,” he said.


Imena, who said there are prospects of petroleum reserves around Lake Kivu, noted that more work still needs to be done.

“We have done initial surveys, airborne surveys were done using planes that looked at most of the parts of the country looking at potential zones. We also sent a boat that carried out a second seismic studies that involved scanning what is below the depth of Lake Kivu,” he said.

“Recently, we analysed the data and compiled a report that gave us encouraging results and we think that continuation is a must. Although it does not tell us the volume of oil, there are good indications and if more promising results came on, we will then proceed with the drilling,” he said.

The minister said the work involved is not easy and needs considerable amount of money to undertake the activities, hence the need to attract investors at an early stage and make sure all legal instruments are in place.

The draft law which in itself is unique despite handling natural resource products is expected to exceptionally handle the management and activities of the upstream petroleum sector.

Should the discovery come out positive, according to Minister Imena, there will be more other laws governing production, processing, distribution and trading.

Under the draft law, the contracted investor will need to announce to the government the discovery six months after positive findings, 30 days after the investor is requested to inform the government on the determination of commercial interests, depth, thickness, and boundaries of the reservoir.

Article 15 of the draft law states that where petroleum has been discovered in an exploration area the contracted investor will inform respective ministry on the potential commercial prospects.

The draft law says the firm lincenced to carry out the exploration must, within 90 days from the date on which the discovery was made, provide the minister in charge a notice stating that the discovery is, or is not of potential commercial interest.


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