Government Makes Second Withdraw from Oil Fund Before Production Commences

Government has withdrawn an extra Shs. 200billion (approx. $54 million) from the petroleum fund, Finance Minister Matia Kasaija announced in a statement on the Ministry website.

The withdrawn money, Kasaija said, is meant to help finance Uganda’s 2018-2019 spending plan which includes development of infrastructure including power plants and roads.

This becomes the second time the government is making a withdrawal from the oil fund before production commences.

Last year, a sum of Shs. 125.3billion (approx. $34million) was withdrawn from the same fund.

This year’s withdrawal leaves the country with only Shs. 288.7billion (approx. $78million) on the petroleum fund account.

What is the Oil Fund?

The oil fund is the money collected by the government from oil-related activities including what’s generated from the output as well as pre-production transactions.

Government started receiving revenue deposits from the transactions in 2015 and had accumulated a total of Shs. 614billion (approx. $165million)

Although France’s Total SA, Cnooc Ltd. of China and London-based Tullow Oil Plc are developing Uganda’s crude finds, the oil fund is exclusively managed by the Ministry of Finance.

A total of 6 billion barrels of oil resources are estimated from Uganda’s oil wells which are based in hoima, with production estimated to start in 2022.