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Tullow Uganda refutes bribery allegations

By Haggai Matsiko

Tullow Oil has refuted claims its officials contemplated bribing President Yoweri Museveni with $ 50 million to meet “M7′s short-term needs and demands”. The claims emerged at a tax dispute in a London court where Tullow is suing Heritage oil for the taxes it paid in Uganda on the latter’s behalf.

“The embarrassment caused to His Excellency the President of Uganda and the people of Uganda by these false allegations and reports is deeply regretted by Tullow,” said Jimmy Mugerwa, General Manager, Tullow Uganda on March.21

Mugerwa added that Aidan Heavey, the CEO and founder of Tullow Oil, has also written to President Museveni  noting that once court proceedings are at an end, Tullow will take all necessary action to clarify the facts to the public.

“I have been Chief Executive Officer of Tullow Oil for 27 years and from humble origins have built Africa’s largest independent Exploration and Production company with an enviable reputation for successful …” Mugerwa quoted Heavey’s letter, “At no point in those 27 years has any allegation of corruption been substantiated in respect of Tullow’s management.”

Khawar Qureshi, a Heritage Oil lawyers claimed in the on-going court Tullow-Heritage case that Tullow Exploration director, McCoss Angus in an e-mail said “it is worth thinking about meeting M7’s short-term needs and demands, and he has already indicated the things he is addressing is his election campaign”.

However, Tullow Oil Company Secretary Graham Martin, said his guess was that McCoss “was using M7 as shorthand for the whole country (Uganda) and that there was no suggestion on his part that we were somehow going to pay funds to Mr Museveni’s election campaign…”

The tax in question is $ 404 million, which Heritage refused to pay after selling its assets to Tullow. The government then forced Tullow to pay the tax before the latter could sell 66 percent of its assets to French oil company, Total E&P and Chinese Oil Ofshore Oil Company (CNOOC) in a $2.9 bn deal.

The case is still being heard but Quereshi’s claims have stirred storm in the British registered oil company’s backyard following wide coverage in both international and local media.

Indeed Mugerwa’s apology to the president follows a letter in which the President’s lawyers, Kiwanuka & Karugire Advocates asked the oil company to clear the air and explain the circumstances under which Tullow officials allegedly considered offering him the bribe in question.

“Our client is astounded by the above grave allegations.” The March.19 letter reads, “Our client’s reputation has been greatly injured by these false statements that are attributed to your Mr McCross. You are no doubt aware that your operations in Uganda are governed by laws and covenants that prohibit your involvement in corrupt practices.”

The lawyers gave Tullow three days to have clarified on whether indeed McCoss made the statements attributed to him by email or otherwise, if so, what was the basis for his assertion that a payment would be necessary to “meet the short term needs and demands”.

They also asked Tullow about who communicated the “short term needs and demands”, whether any payment was made  and if not, and the report is completely false, what steps they have taken to ensure that the record is corrected and that those responsible for the fabrication, if indeed it is a fabrication, are brought to book. “We expect a response by close of business on Friday the 22nd of March. We trust that you shall oblige,” the letter adds.

This is not the first time Tullow has to defend itself for linking Museveni to oil bribes. In 2011, a leaked US diplomatic cable, a Tullow official allegedly said that Tullow believed ENI made personal payments to President Museveni and Ministry of Energy officials in return for Tullow’s offshore exploration rights. Museveni said such was “despicable”.

Tullow’s full statement

For immediate release

Press release from Tullow Uganda PTY re: Tullow vs Heritage trial in London

21 March 2013

Jimmy Mugerwa, General Manager, Tullow Uganda said today:

“Following recent allegations in the Ugandan press about the conduct of Tullow Oil, I would like to state the following:

Tullow is involved in an on-going court case in London where we are suing Heritage Oil for taxes paid in Uganda by Tullow on behalf of Heritage. These taxes were paid by Tullow after Heritage left Uganda claiming that they did not owe the Government and People of Uganda any tax at all, a position that lacks any substantive legal argument.

During this court case, Tullow witnesses have been subject to cross-examination by Heritage’s counsel during which various false allegations, crude smears and insinuations have been made. While Tullow witnesses clearly rejected the allegations made, this cross-examination has resulted in selective, partial and out of context reporting of the court proceedings. The embarrassment caused to His Excellency the President of Uganda and the people of Uganda by these false allegations and reports is deeply regretted by Tullow.

Tullow is restricted in what it can say publicly because this court case against Heritage is on-going. However, with regard to the false allegations made in court, let me state unequivocally:

o No Tullow director or employee has ever suggested or considered making payments to HE The President. Furthermore, at no time has His Excellency ever suggested that Tullow should make such payments and any allegation to the contrary is false and deeply insulting.

o No Tullow director or employee has ever suggested or considered making payments to any political party in Uganda.

o No Tullow director or employee has ever directed that any payments be made in Uganda other than those made to the proper authorities in the course of our normal business.

Aidan Heavey, CEO and founder of Tullow Oil, has written to the HE The President and has made Tullow’s position clear. He also assured His Excellency that, once court proceedings are at an end, Tullow will take all necessary action to clarify the facts to the public and is confident in the merits of its legal position and of its corporate behaviour at all times.

Mr. Heavey concluded his letter to the President by stating, “I have been Chief Executive Officer of Tullow Oil for 27 years and from humble origins have built Africa’s largest independent Exploration and Production company with an enviable reputation for successful and entrepreneurial business through fair and ethical dealing with Government and local communities. At no point in those 27 years has any allegation of corruption been substantiated in respect of Tullow’s management.”

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