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Thursday 17 April 2014

Uganda set to approve Tullow Oil asset sale

Uganda is set to approve Tullow Oil’s sale of oil field assets to Cnooc Ltd and Total SA, said Patrick Bitature, the chairman of the Uganda Investment Authority.

“Government has given a nod in principal,” Bitature told reporters today in the capital, Kampala. Planned investments by Cnooc and Total are expected to be reflected in the authority’s reports for the last quarter of the year, he said.

Tullow announced plans for a three-way partnership with Cnooc and France’s Total after acquiring stakes owned by Heritage Oil Plc, its former partner in Ugandan oil blocks.

While there is a moratorium on awarding new oil exploration blocks because of pending legislation, Cnooc and Total’s participation will be approved because they are joining an already licensed project, Bitature said.

“We look forward to another successful quarter to crown the year 2010,” he said at the unveiling of an investment report for the last quarter. “We hope we will be able to include the investments in the oil and gas sector.”

Tullow and Heritage found commercially viable oil deposits in Uganda. The explorer acquired Heritage’s interest in two blocks for $1.5bn in August after Uganda gave conditional approval for the sale in July.

Uganda has an estimated 2 billion barrels of oil, with 800 million barrels already discovered, according to Tullow.

Tullow, Cnooc and Total will develop fields in the Lake Albert basin, which may pump more than 200,000 barrels of oil a day in 2014 or 2015.

The explorer increased its estimate for discovered resources in Uganda to 1 billion barrels of oil from an earlier forecast of 800 million barrels.

Uganda is set to become an oil producer when London-based Tullow begins production at the Kasamene field next year.

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