Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013

The Act's purpose is to implement Uganda's National Oil and Gas Policy by establishing a legal framework and measures to enable and regulate midstream operations, promote investment and state participation, ensure security, public safety, public health and environmental protection, and promote equitable access and national content.

This section provides definitions and interpretation rules for terms used in the Act (for example: "Act", "Authority", "Minister", "licensee", "midstream operations", and related technical and administrative terms).

Licensees and persons exercising functions under the Act must take into account and comply with environmental principles; licence and management requirements apply to waste from midstream operations and unlicensed management is an offence punishable by fine or imprisonment.

Licensees must not flare or vent petroleum beyond quantities needed for normal operational safety without Ministerial approval on the advice of the Authority; in an emergency the licensee may flare or vent but must keep flaring at the lowest possible level and submit a technical report.

This Part applies to liability for pollution damage from a facility when the damage occurs in Uganda or affects specified Ugandan vessels, vehicles, locomotives, craft or facilities; the Minister may prescribe regulations about liability for pollution damage caused by midstream operations, and such regulations must not restrict the right to compensation under the Act.

Licensee is strictly liable for pollution damage from midstream operations; liability may be reduced where a force majeure event beyond the licensee's control substantially contributed to the damage.

If pollution damage happens during a midstream operation conducted without a licence, the party that carried out the operation is liable for the damage regardless of fault; the same liability applies to others who took part and knew or should have known there was no licence.

If a licensee is ordered to pay compensation for pollution damage but does not pay within the judgment time, the harmed party may sue the polluter; a licensee may also claim compensation from the party causing pollution damage.

A licensee must not claim recourse for pollution damage against a person exempted under section 60(2) except where that person or their servant acted wilfully or with gross negligence.

Legal action for compensation for pollution damage must be brought before a competent court in the area where the effluence or discharge of petroleum commodities or products has taken place.

A refinery or conversion plant in Uganda must, when available, give priority to petroleum commodities produced in Uganda.

The licensee must determine the gate price for petroleum products, with the approval of the Authority, in a manner prescribed by regulations and subject to the international import parity pricing principle.

The Minister may order a licensee to supply petroleum products to meet Uganda requirements and may direct the recipient; if so, the Minister must give the licensee forty five days notice before delivery.

In war, threat of war, natural disaster or other crisis the Minister (with Cabinet approval) may direct a licensee to place petroleum at the State's disposal; the Minister must determine pricing in certain crises (in consultation) and must report to Parliament within six months.

A licensee must submit and update a decommissioning plan to the Authority; the Authority may require further information or a new plan; the plan must be submitted no earlier than four years and no later than two years before expected permanent termination unless the Authority directs otherwise.

The Minister must, by regulations, establish a decommissioning fund for midstream facilities; the Authority must charge the licensee quarterly a portion of estimated future decommissioning costs. The fund commences from the calendar quarter when specified conditions occur (including reaching fifty percent of project life, five years before licence expiry, or on notice of surrender).

The licensee must notify the Authority of the time of termination of a facility when the facility is expected to terminate permanently before the licence expires.

The Minister may issue directions about disposing decommissioned facilities and must set a time limit; the Minister may set conditions. Licensees (and in some cases owners and users) must ensure disposal directions are carried out, even after licence expiry; if not done in time the Minister may act at the responsible parties' cost. If the decommissioning fund is insufficient, the licensee must cover extra costs.

If a licence has been surrendered or expired, the Authority must serve a written notice directing the (current or former) licensee within the specified period to remove facility property, close off operations and make satisfactory environmental protection arrangements; failure to comply is an offence punishable by a fine not exceeding five thousand currency points.

Section Removal and sale of petroleum by the Authority Section Subject to section 51 and with the approval of the Minister, where a direction given under section 46 or 47 has not been complied with, the Authority may— The Authority may

Licensees who must implement a disposal direction (under section 46) are liable for damage or inconvenience caused by disposal or implementation; abandoned facilities also give rise to liability; multiple liable parties are jointly and severally liable; the licensee and Minister may agree for the Government to take over maintenance and liability with agreed compensation.

If the Government requires removal of a facility, any lien, charge or encumbrance on that facility automatically lapses; if the Government takes over the facility under section 51, rights of use established with the Minister's consent remain in force.

The Government may take over a licensee's facilities when the licence expires, is surrendered or cancelled, or the facility's use is permanently terminated; the licensee may continue operating if it pays the prescribed fee and is not in default.

Subject to section 7, the Government may participate in midstream operations; the Minister must, with the approval of Cabinet, specify the form and manner of that participation.

Licensees and their contractors/subcontractors must prioritise Ugandan citizens and Ugandan-owned registered entities when providing goods and services, purchase local products where competitive, report yearly to the Authority within 60 days, and the Authority must forward that report to the Minister within 30 days for the Minister to lay before Parliament annually; contraventions are an offence with specified fines or imprisonment.

Licensees must submit a detailed recruitment and training programme for Ugandans to the Authority within twelve months of licence grant and on each anniversary; licensees must also submit a report on execution; the Authority must, with the Minister's approval, provide guidelines.

A licence must include a clearly defined training programme for the licensee's local employees, and must include a commitment by the licensee to maximise transfer of knowledge and skills to Ugandans and to establish management and technical capabilities and necessary facilities in Uganda.

The Minister may, after consulting the Authority, consent to a licensee using their share of a licence as security for financing operations, in a manner prescribed by regulations.

A licensee must carry out midstream operations so as to maintain and develop a high level of safety, identify and evaluate hazards and risks to workers, and, as far as reasonably practicable, prevent or else minimise their exposure.

An operator must take necessary precautions to ensure the safety of persons employed or present near a facility, protect facilities, the environment and natural resources (including preventing pollution), and ensure that the person mentioned in paragraph (a)(i) is informed of those precautions.

A licensee and other participants in midstream operations must maintain efficient emergency preparedness; the licensee must ensure measures to prevent or reduce harm and restore the environment; the Minister may issue directions to implement those measures.

The licensee must maintain security measures and contingency plans, place facilities at public authorities' disposal for emergency and security drills and participate where necessary; the Minister may direct implementation of those measures.

The Authority may direct creation of safety zones around midstream facilities, may establish or extend them in accidents or emergencies, determines their extent, and unauthorised vessels or objects must not be present in those zones.

If an accident or emergency in section 65 occurs, the licensee or other person responsible must suspend midstream operations as necessary; the Minister may order suspension or impose conditions and may, on application where the Minister's order is based on circumstances not caused by the licensee, extend the licence period and mitigate the licensee's obligations.

The licensee must prepare a health and safety plan in accordance with sections 67 or 63 and must submit the plan and implementation documentation to the Minister as part of regulatory health and safety supervision.

Licensees and other persons engaged in midstream operations must have necessary qualifications; the licensee must ensure workers comply; the Minister may prescribe qualifications by regulation.

If a serious accident occurs in midstream operations, the Minister may appoint a commission of inquiry, must publish the inquiry report within six months of completion, and must lay the report before Parliament.

A licensee must keep at an address in Uganda, notified to the Authority, complete and accurate records of specified information, and a person who fails to keep such records without lawful excuse or who makes a knowingly false statement is addressed by the section.

If a licence is terminated, revoked or expires, the person who was the licensee immediately before that event must immediately deliver specified records, plans, tapes and other documents to the Authority in a format acceptable to the Authority.

The Minister may, in accordance with the Access to Information Act, 2005, make specified licence-related information available to the public.

Data submitted to the Minister by a licensee must be kept confidential and not disclosed, except in specified permitted situations including Ministerial disclosure after fifteen days’ prior written notice and disclosures by licensees or subsidiaries with prior ministerial consent or by the Authority with prior licensee consent.

Prohibits persons (including current or former public servants and Authority board members) from disclosing information obtained in employment for ten years, subject to specified permitted disclosures and a defence if the information was already generally known.

A person must not, without reasonable excuse, obstruct, molest or hinder an authorised officer in the exercise of powers under this Act, or knowingly or recklessly give an authorised officer a materially false or misleading statement or document.

Inspectors may enter and inspect midstream operation premises at reasonable times and exercise specified inspection powers; owners or persons in charge must give reasonable assistance; inspectors generally may not enter private dwellings except with consent or a warrant.

A person must not willfully delay or obstruct an inspector, must not refuse reasonable assistance to an inspector, and must not knowingly or negligently give an inspector false or misleading information.

Persons must not, without reasonable excuse, obstruct, molest, hinder or prevent a licensee from doing acts authorised by the Act or by the licence; doing so is an offence punishable by a fine not exceeding five thousand currency points or imprisonment not exceeding five years or both.

If an offence by a body corporate is proved to have been committed with the consent or connivance of, or due to neglect by, a director, manager, secretary or similar officer (or someone purporting to act as such), that person, as well as the body corporate, also commits the offence and is liable to be prosecuted and punished.

When a person is convicted under this Act, the court may order forfeiture of property or payment to the Government in addition to other penalties.

It is an offence for a person who wilfully or negligently contravenes any directive issued under this Act; on conviction individuals face up to a fine of ten thousand currency points or up to five years imprisonment (or both), and bodies corporate face a fine up to one hundred thousand currency points.