Nampewo Mbowa replaces Mugerwa as Tullow Uganda General Manager
Tullow Uganda Operations Pty Ltd recently appointed Mariam Nampeera Mbowa, a seasoned lawyer with vast experience in the oil and gas sector, as the company’s General Manager. Nampeera, replaces Jimmy Mugerwa who was recalled to Tullow Oil Plc headquarters in Landon in mid-August 2019, as a director in charge of infrastructure and operations.
Tullow Uganda Operations Pty – is a subsidiary of the British oil giant Tullow Oil Plc. Tullow Oil is one of the five oil exploration and production companies in Uganda and it holds 33.3 percent interests in Exploration Areas (EA) 1, 1A, 2 and 3A in the Albertine graben.
It was not clear why Mugerwa was moved from Uganda at the time when the company is in the process of making a Final Investment Decision (FID). Tullow is also embroiled in negotiations with government of Uganda over the payment of Capital Gains Tax (CGT), on the proposed farm-down of part of the company interests to Total E&P Uganda BV and CNOOC Uganda Ltd.
His recall could be attributed to the troubled reign as board Chairman of DFCU Bank and his failure to conclude negotiations with government over Capital Gains Tax. In its half year results report of 2019, released in July, Tullow expressed its dissatisfaction with the sluggish nature of negotiations with Government of Uganda that has led to delays in completion of the farm-down. DFCU bank has been embroiled a series of scandals arising out of the controversial take-over of Crane Bank Limited under the stewardship of Mugerwa as the board chair – something that was in turn tarnishing Tullow’s international image.
CONTROVERSY OVER CGT
Mugerwa broke barriers as the first Ugandan to head an oil exploration and production company in Uganda. However, the last two years of his tenure in Uganda, Tullow has been in protracted negotiations with government over the payment of capital gains tax. His recall could be attributed to the company’s frustrations with government of Uganda overall.
In January 2017, Tullow announced that it had agreed to farm-down (sell) 21.57% of its 33.33% interests in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total E&P Uganda B.V (and CNOOC Uganda limited) for a total consideration of $900 million. However, the farm-down has to be approved by government upon satisfaction that the relevant taxes – in this case, Capital Gains Tax has been paid. The tax dispute is over a $ 167 million (approximately Shs 617 billion), a bill Uganda Revenue Authority slapped on Tullow for its sale of $ 900 million worth of assets to Total and CNOOC.
However, Tullow objected the bill on grounds that given the costs it had incurred, $167 million tax bill was not correct – sparking a stalemate. Though Tullow and Total want a political settlement to a tax dispute, President Museveni has in the last meetings in January and April 2019, insisted that the tax dispute should be settled with URA and not him. This has prolonged the disagreement with no quick end in sight, further complicating the Final Investment Decision (FID) and consequently ‘first oil’ target.
Once the farm- down is completed, Tullow will remain with only 10 percent interest in the up-stream and mid-stream (mainly pipeline) and with no management role. Mugerwa’s recall to Landon comes at the time when Tullow Oil Plc announced a major discovery in the Orinduik block in Guyana, raising expectations that it could move to develop the oil fields there.
WHO IS MARAIM NAMPEERA MBOWA?
Nampeera is no stranger to the oil and gas sector. Prior to her appointment, she has been working as General Counsel – East Africa where she headed Tullow Uganda and Kenya legal teams. She worked as company secretary and legal advisor for Shell Uganda between 1998 and 2003 and she also served Shell International BV in different capacities. She also worked as legal officer for Uganda Petroleum Company Limited (formerly Mobil Oil Uganda) between 1994 and 1998. She holds a Bachelor of Laws degree of Makerere University, Master of Laws from Landon School of Economics and a Diploma in Legal Practice from the Law Development Centre.
By: Edward Ssekika,
Edited by Muhumuza Didas