Uganda MPs demand special session over oil tax row

Ugandan legislators want the speaker to call an emergency session of the house to discuss a government dispute with Britain's Heritage Oil over tax payments, an opposition MP said on Monday.

The East African country discovered hydrocarbon deposits in 2006 and UK-based Tullow Oil, the country's leading explorer, says production is scheduled to start early next year.

Abdu Katuntu, an opposition MP and shadow attorney general, told Reuters he had already collected enough signatures required to call parliament from recess for an emergency session.

A petition for a special sitting of parliament must be supported by a minimum of 125 legislators and Katuntu said he had already gathered more than that from the 388 member house.

We want a special session to debate this increasing secrecy in our oil sector plus why Uganda agreed to the arbitration in London as though we don't have courts here, he said.

Heritage has been locked in a dispute with the government of Uganda over $404 million worth of capital gains tax.

The company earned $1.45 billion from the sale of its exploration assets in the country to Tullow oil last year and Uganda says it must pay 30 percent of the amount as tax.

Heritage says its earnings are not subject to tax and has always preferred that any arbitration procedures to resolve the dispute must take place in London.

Although the Ugandan government had initially said the row would be settled in local courts, it recently changed course and accepted Heritage's proposal to go to London.

The government has hired an American legal firm, Curtis, Mallet-Prevost, Colt & Mosle LL, to represent it but the Attorney General Peter Nyombi recently refused a parliamentary committee demand that he disclose details of their contract.

First of all we asked government to give us the contract it signed with Curtis and they refused, said Beatrice Anywar, opposition MP and shadow minister for natural resources.

This government is allergic to transparency when it comes to oil and we can't allow that to continue because it is a public resource and people must know.

Nyombi has said disclosure of its agreement with Curtis would violate confidentiality clauses and could create legal liability.