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Tullow free to exit after concluding tax talks

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By NJIRAINI MUCHIR & HALIMA ABDALLAH

Kampala. British Oil firm Tullow is set to formally exit active operations in Uganda, after agreeing to a payment plan for taxes on its farm-down to Total E&P.
The company agreed to pay $167m in capital gains tax to Uganda Revenue Authority (URA), clearing a hurdle that government had erected for consent to its exit plans.

The development follows close to two years of haggling over the tax.
Initially, URA assessed the tax at $300m over all of Tullow’s assets valued at $900m, but the oil firm said that the transaction wasn’t taxable.

Since then, there have been negotiations over the amount, which finally came down to $167m.
Last month Tullow Oil and Total E&P chief executives and President Museveni met in Entebbe where outstanding issues on the disputed tax were resolved.

Although the tax matter was in respect of Tullow, Total took a hand in order to help reach a conclusion.
Sources familiar with the matter said Total agreed to meet part of the tax without giving a breakdown.
“Tullow has agreed on the principles of the capital gains tax on its $900m farm-down to CNOOC [China National Offshore Oil Company] and Total. The government and partners are now engaged in discussions to finalise an agreement reflecting this tax treatment that will enable the completion of the farm-down,” notes published along Tullow’s 2018 full-year results, read in part.
On January 1, 2017, Tullow announced it had signed a sale purchase agreement with Total E&P to transfer 21.57 per cent of its 33.33 per cent stake in the joint venture partnership, which includes CNOOC. Tullow will now own a stake of 11.7 per cent.
In March 2017, Tullow experienced the first hurdle in the bid to sell its shares to Total when CNOOC exercised its pre-emption rights and demanded half of the shares that were traded to Total after the parties had concluded agreements. The process was restarted to accommodate CNOOC’s demands.

That was the easy part. The difficult part was how CNOOC and Total would operate blocks formerly under Tullow. That discussion was lengthy and was only resolved after government mediated between the two.
In the meantime, Tullow applied for a private ruling to understand whether the proposed transaction was taxable.
URA responded in the affirmative and went on to assess the taxes, which resulted in a disputed amount.
“The Tullow farm-down has been resolved; so it is no longer an issue,” said Mr Peter Muliisa Uganda National Oil Company legal officer.

Uganda has 6.5 billion barrels of oil, with between 1.4 billion and 1.7 billion recoverable in the 40 per cent explored areas of Albertine Graben.
When the farm-down is finally over, Tullow anticipates to receive a cash payment of $100m.
Another $108 million has been deferred for the pre-completion period. A further $50 million of cash consideration will be received upon the final investment decision.
Tullow will reinvest the remaining money in the upstream operations and the East African Crude Oil Pipeline as its share contribution.

Tullow planned to sell a greater stake in Uganda so as to free financial resources to enable it to continue with its operations in Kenya.
This development implies that Tullow will spend a small fraction of its planned $570 million African investment this year in Uganda.

In Kenya
In Kenya, Tullow plans to reach a final investment decision on the South Lokichar basin by the end of 2019, with a projected production for 2022. This, however, will require several key milestones stones, including land acquisition, commercial frameworks and contract wards. An exploration appraisal confirmed that the South Lokichar basin contains 240 million to 560 million barrels of oil, with 1,230 million barrels recoverable.

-Daily Monitor

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DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Breaking: Witness Radio and Partners to Launch Human Rights Monitoring, Documentation, and Advocacy Project Tomorrow.

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By Witness Radio Team.

Witness Radio, in collaboration with Dan Church Aid (DCA) and the National Coalition for Human Rights Defenders (NCHRD), is set to launch the Monitoring, Documentation, and Advocacy for Human Rights in Uganda (MDA-HRU) project tomorrow, 22nd February 2024, at Kabalega Resort Hotel in Hoima District.

The project, funded by the European Union, aims to promote the protection and respect for human rights, and enable access to remedy where violations occur especially in the Mid-Western and Karamoja sub-regions where private sector actors are increasingly involved in land-based investments (LBIs) through improved documentation, and evidence-based advocacy.

The three-year project, which commenced in October 2023, focuses its activities in the Mid-Western sub-region, covering Bulisa, Hoima, Masindi, Kiryandongo, Kikuube, Kagadi, Kibale, and Mubende districts, and Karamoja sub-region, covering Moroto, Napak, Nakapiripirit, Amudat, Nabilatuk, Abim, Kaabong, Kotido, and Karenga districts.

The project targets individuals and groups at high risk of human rights violations, including Human Rights Defenders (HRDs) and Land and Environmental Defenders (LEDs). It also engages government duty bearers such as policymakers and implementers in relevant ministries and local governments, recognizing their crucial role in securing land and environmental rights. Additionally, the project involves officials from institutional duty bearers including the Uganda Human Rights Commission (UHRC), Equal Opportunities Commission, and courts, among others.

Representatives from the international community, faith leaders, and business actors are also included in the project’s scope, particularly those involved in land-based investments (LBIs) impacting the environment.

The project was initially launched in Moroto for the Karamoja region on the 19th of this month with the leadership of the National Coalition for Human Rights Defenders (NCHRD).

According to the project implementors,  the action is organized into four activity packages aimed at; enhancing the capacity and skills of Human Rights Defenders (HRDs) and Land and Environmental Defenders (LEDs) in monitoring, documentation, reporting (MDR), and protection, establishing and reinforcing reporting and documentation mechanisms for advocacy and demand for corporate and government accountability;  providing response and support to HRDs and marginalized communities; and lastly facilitating collaboration and multi-stakeholder engagements that link local and national issues to national and international frameworks and spaces.

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DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Kiryandongo leadership agree to partner with Witness Radio Uganda to end rampant forced land evictions in the district.

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By Witness Radio team.

Kiryandongo district leaders have embraced Witness Radio’s collaboration with the Kiryandongo district aimed at ending the rampant violent and illegal land evictions that have significantly harmed the livelihoods of the local communities in the area.

The warm welcome was made at the dialogue organized by Witness Radio Uganda, Uganda’s leading land and environmental rights watchdog at the Kiryandongo district headquarters, intended to reflect on the plight of land and environmental rights defenders, local and indigenous communities and the role of responsible land-based investments in protecting people and the planet.

Speaking at the high-level dialogue, that was participated in by technical officers, policy implementers, religious leaders, leaders of project affected persons (PAPs), politicians, media, Civil Society Organizations (CSOs), and development partners that support land and environment rights as well as the Land Based Investments (LBIs) Companies in the Kiryandongo district, the leaders led by the District Local Council 5 Chairperson, Ms. Edith Aliguma Adyeri appreciated the efforts taken by Witness Radio organization to organize the dialogue meeting aimed at bringing together stakeholders to safeguard community land and environmental rights in order address the escalating vice of land grabbing in the area.

During the dialogue, participants shared harrowing accounts of the impacts of land evictions and environmental degradation, including tragic deaths, families torn asunder, young girls forced into marriage, a surge in teenage pregnancies, limited access to education, and significant environmental damage which have profoundly affected the lives of the local population in Kiryandongo.

Participants attending the dialogue.

In recent years, Kiryandongo district has been embroiled in violent land evictions orchestrated to accommodate multinational large-scale agriculture plantations and wealthy individuals leaving the poor marginalized.

According to various reports, including findings from Witness Radio’s 2020 research Land Grabs at a Gun Point, the forceful land acquisitions in Kiryandongo have significantly impacted the livelihoods of local communities. It is estimated that nearly 40,000 individuals have been displaced from their land to make room for land-based investments in the Kiryandongo district. However, leaders in the district also revealed in the dialogue that women and children are affected most.

The Kiryandongo Deputy Resident District Commissioner, Mr. Jonathan Akweteireho, emphasized that all offices within the Kiryandongo district are actively involved in addressing the prevalent land conflicts. He also extended a welcome to Witness Radio, acknowledging their collaborative efforts in tackling and resolving land and environmental issues in the district.

“Ladies and gentlemen, we all know that the land rights together with environmental rights have been violated in our district, but because we don’t know what our rights are, because we have not directly done what we could to safeguard our rights and now this is the time that Witness Radio has brought us together to safeguard our rights. I want to welcome you in Kiryandongo and be rest assured that we shall give you all the necessary support to help us manage these rampant cases,” Ms. Adyeri said in her remarks during the dialogue meeting.

The team leader at Witness Radio Uganda, Mr. Geoffrey Wokulira Ssebaggala expressed gratitude to the participants for their active involvement in the dialogue and revealed that Witness Radio’s objective is to find a holistic solution to the escalating land disputes in Kiryandongo district serving as an example to other districts.

“We are here to assist Kiryandongo district in attaining peace and stability because it stands as a hotspot for land grabbers in Uganda. Mismanagement of land conflicts in Uganda could potentially lead to a significant internal conflict. Everywhere you turn, voices are lamenting the loss of their land and property. Kiryandongo, abundant with ranches, suffers from a lack of a structured framework, which amplifies these land conflicts. The influx of wealthy investors further complicates the situation,” Mr. Ssebaggala disclosed.

Within the dialogue, Mr. Ssebaggala emphasized the need for the Kiryandongo district council to pass a by-law aimed at curbing land evictions as an initial step in addressing the prevalent land injustices.

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WITNESS RADIO MILESTONES

Kiryandongo authorities decry rising cases of land disputes

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The LC5 chairperson of Kiryandongo, Ms Edith Aliguma Adyeri, has saidnland dispute has impacted on people’s lives, dignity and children’s education in the district.

Just like other parts of Uganda, conflicts over land in Kiryandongo arise when individuals – who often are blood relatives – compete for use of the same parcel of land or when members of the community lay claim over ownership of unutilised government land.

Ms Adyeri further said land and environmental rights affect people both directly and indirectly, “and we are not hearing it from afar. It is already together with us [here], it has already affected us!”

She was speaking at a meeting which sought to discuss alternative remedies to salvage the appalling land and environmental rights situation in Kiryandongo at the district headquarters on Thursday.

The one-day dialogue was aimed at reflecting on the plight of land and environmental rights defenders, local and indigenous communities and the role of responsible land-based investments in protecting people and the planet.

It was attended by private companies, members of civil society and local government officials and organised by Witness Radio – an advocate for land and environmental rights in Uganda – in partnership with Oxfam, and Kiryandongo District leadership.

“Some people have even died, families are broken up, and brothers are not seeing eye-to-eye because of land rights. Access to justice is equally becoming very difficult because when you hire one lawyer that
lawyer will talk to learned friends, and they agree. They leave you in suspense,” Ms Adyeri said.

According to her, some children have not accessed education because of land and environmental rights.

Mr Jonathan Akweteireho, the deputy Resident District Commissioner of Kiryandongo, said enlightened people especially should be sensitive to the historical injustice of this area.

“We can never handle the Bonyoro land question without thinking about that history. It will be an injustice to the incomers, to the government and to the leaders who don’t understand,” he said.

“We had 38 ranches here which on the guidance of these international organisations, especially the World Bank, the government restructured them, allowing people to settle there, they were never given titles and up to today, there are big problems in all those ranches,” he added.

Mr Jeff Wokulira Ssebaggala, the executive director of Witness Radio, said that a well-functional land sector supports land users or holders and investors, reduces inefficiencies and provides mechanisms to resolve land disputes.

Mr David Kyategeka, the secretary to the Kiryandongo District Land Board, said the issue of land rights is very clear but the major challenge has been sensitising the locals to know what rights he or she expects to enjoy out of this very important resource.

Source: www.monitor.co.ug

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