Uganda will deliver its decision on UK explorer Tullow Oil’s purchase of Heritage Oil’s assets in the country by April, a top energy official said yesterday.
Tullow is in the process of acquiring Heritage’s 50 % equity in their jointly owned exploration blocks 1 and 3A and has also applied to the government to be allowed to sell stakes in its exploration properties to China’s China National Offshore Oil Corporation, CNOOC and France’s Total.
Tullow said separately it continued to hold talks with the Ugandan government about bringing in partners to its Lake Albert oil fields.
“We have made our evaluation criteria very clear and we expect this evaluation process to end soon and by April we’ll be giving a go ahead,” Energy Ministry’s permanent secretary, Kabagambe Kaliisa, told a news conference.
The decision will end months of discussions between the Ugandan government and oil companies as Heritage seeks to exit Uganda and Tullow looks to acquire sufficient resources to finance the development phase of Uganda’s evolving petroleum industry.
Last week Total and CNOOC presented their investment and development plans to the Ugandan government.
Kabagambe also said the government will produce an oil law by June this year, to create a new legal environment for the country’s petroleum sector.
“The current legal framework is very inadequate in ensuring that Uganda gets maximum value from her oil and gas resources and that’s why we need a new law,” he said.
The law is expected to define how revenues will be shared between central and local governments and to institute measures to limit environmental damage from exploration.
An oil law is also expected to clear the way for a new round of exploration licenses. Licensing was suspended in 2006 pending the introduction of a new legal regime for the industry.
The government also said a feasibility study for a refinery will be completed by July. Construction of the refinery is to commence shortly after.
Uganda discovered oil in 2006 and reserves are estimated at about 2 billion barrels.