East African lawyers attend training in negotiation and transaction agreements in Oil & Gas sector

Experts have warned that the lack of skills when negotiating transactions and drafting agreements with international oil companies in relation to the extractive industry could cost east African countries leaving them disadvantaged.

Speaking during a training organized by the African development bank and conducted by DLA Piper Rwandan Justice Minister Johnstone Busingye warned the poor skills in the sector will continue to hurt the region and people living on top of such resources.

“Many countries lack skills in negotiating such agreements and the consequences of poor contracts are persistent poverty and environmental degradation. You need knowledge to ensure that contracts are well prepared,” he said.

The training that targets lawyers and professors likely to be involved in such discussions also emphasizes the need for professionals to advice governments on how to manage and identify the right oil companies to deal with.

Citing the example of a tussle between the Ugandan government, Tullow Oil and Heritage Oil where the two companies had failed to pay a $313 million tax to the state the countries principal state attorney Ben Turyasingura warned states to be extra vigilant.

“Our region suffers a knowledge gap in exploration of resources, that’s why we have to be aware when dealing with them. We need more training, otherwise these people are not our friends they just want our resources,” said Turyasingura.

Experts also urged East African states to create new models to work with rather than relying on templates from other jurisdictions while undertaking such negotiations.

East African countries have in the past few years discovered huge amounts of Oil in Kenya and Uganda while Methane Gas in Rwanda and natural gas in Tanzania has already kicked off the mining process.

“Natural resources is a new sector in the region and we don’t have the expertise; we have done contract laws but we need deep knowledge on oil, gas and other naturals to protect resources,” said DLA Piper’s partner in the Project and Finance team in the Oslo office Fredrik Lindblom.