Total E&P and CNOOC have been dragged to court on accusations of violating laws on provision of national content in regard to ongoing procurements for the East African Crude Oil Pipeline (EACOP) project and oil exploration projects in Bunyoro Sub-region.

Also sued is the Petroleum Authority of Uganda, which the petitioner, Mr Andrew Oluka, a Kampala-based lawyer, says has connived with the two foreign companies to lock Ugandan firms out of investments in the pipeline project and in the bidding for the exploration of oil wells.

Through his lawyers of Muwema and Co. Advocates, Oluka claims that procurements worth $5b under EACOP, Tilenga ($5b) and Kingfisher Development Area ($2.5b) all went to foreign companies, which is in contravention of the laws.

“The applicant is interested in ensuring that … procurements is done in accordance with the Constitution and national content provisions …” documents filed before court this week read in part.

Oluka adds that whereas the Petroleum Authority of Uganda is required to ensure that all licenses uphold laws, regulations, rules, contract terms and fair practice, none of the expression of interest notices have included a qualification requirement necessitating a bidder to be a Ugandan company for purposes of participating in the procurement process.

Oluka wants court to direct Petroleum Authority of Uganda to conduct a legal audit of all petroleum procurement activities to ensure compliance with the national content provisions.

The EACOP is a 1,443 kilometre crude oil export pipeline that will transport Uganda’s crude oil from Kabale – Hoima to a maritime port on the Chongoleani Peninsula near Tanga in Tanzania.

Total and CNOOC are international oil companies, who, between 2016 and 2020 signed agreements with government to undertake exploration, development and production of petroleum products in Uganda.

Uganda hopes to start actual oil production after 2023. Projects worth billions of dollars are in plans including the refinery and the pipeline. According to industry estimates, oil companies are expected to spend an additional $15-$20bn in the next stages of oil development.

Uganda has come up with the local content regulations to ensure that Ugandans and their companies are contracted to do some of the contracts.