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Museveni strikes deal on oil and arms with Russia

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Russian President Vladimir Putin (right) speaks with Uganda's President Yoweri Museveni during their meeting at the Novo-Ogaryovo state residence outside Moscow on December 11, 2012. AFP

Russian President Vladimir Putin (right) speaks with Uganda's President Yoweri Museveni during their meeting at the Novo-Ogaryovo state residence outside Moscow on December 11, 2012. AFP  

By Tabu Butagira

Posted  Wednesday, December 12  2012 at  02:00
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Kampala

Russia’s largest private crude producer, LUKoil, has expressed interest in the exploration, production and refining of Uganda’s waxy oil, according to reports in the Russian media.

The development came a day before President Museveni met his Russian counterpart Vladimir Putin in Moscow Tuesday, where they discussed prospects of bilateral cooperation on energy and mining.
Mr Putin’s office issued a statement after the meeting, indicating military supplies were on the table alongside talks on investments in engineering, construction and finance.

“Vladimir Putin and [the] President of Uganda Yoweri Museveni discussed prospects for bilateral cooperation in energy, engineering, geological exploration, construction, finances and military supplies, the Kremlin said, “Views were also exchanged on the situation in Africa.”
Details of the talks were scanty by press time, although it is understood the two spoke at length about oil and gas, a sector in which Mr Museveni is scouting for overseas investors.

Approval and doubts
In Kampala, industry analysts approved of the President’s involvement, as the country’s chief executive, to market Uganda’s oil wealth abroad and source investors if he does not personally seal deals.

“The issues of oil and gas the world over has the involvement of the Head of State; so, the President is not out of order to go to Russia and talk about oil and gas,” Mr Dennis Kusasira, a Natural Resources lawyer said.

The CEO of the Africa Institute of Energy Governance, Mr Dickens Kamugisha, said there was a possibility Mr Museveni was looking to Russia to avoid the Extractive Industries Transparency Initiative (EITI) scrutiny. The EITI requires companies in the extractive sector and those endowed to publish what they pay and receive, respectively. Russia is neither compliant nor candidate of EITI, implying it has no obligation to disclose transactions in its oil and gas industry.

Mr Kamugisha said Russia’s oil sector was soiled by corruption allegations, making it inappropriate to learn from them: “I feel President Museveni wants to open so many windows so that he does not deal with countries asking him for transparency. The problem is that [Museveni] is treating the oil as if it was his personal property”.

Uganda has confirmed oil reserves of 3 billion barrels, but production has delayed over disagreements.

In a statement emailed from Moscow, Deputy Presidential Spokesperson Lindah Nabusayi said Mr Putin had extolled Mr Museveni’s role in strengthening ties with them, resulting in a big leap in bilateral trade. “I am happy to be here because of the support that the Union of Soviet Socialist Republic gave our freedom fighters,” Mr Museveni had said.

tbutagira@ug.nationmedia.com


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