Uganda is now set for the steady development of its oil sector following the entry of CNOOC and Total into the oil processing and production industry of the country.
Key oil prospecting firm Tullow Oil announce that it signed Sale and Purchase Agreements (SPAs) with CNOOC and Total in respect of the sale of a one third interest to each party of the interests Tullow holds in Exploration Areas 1, 2 and 3A in Uganda.
Tullow will retain a one third interest in a move the government of Uganda insisted would ensure there is no monopoly in Uganda’s oil sector. Tullow will be paid US$2.9 billion cash for 2/3 of its stake in the blocks in mid western Uganda that were declared ready for oil production.
Under the MoU, Tullow and its new Partners, CNOOC and Total, have been granted new licences over EA-1 and an onshore area of EA-3A and the partnership’s rights to develop the Kingfisher discovery.
According to a statement from Tullwo Oil, a clear plan for the resolution of tax disputes on the various asset sales has been agreed by the GoU, the URA and Tullow. “The next step is for Tullow to make certain tax related payments to the GoU, on receipt of which all relevant consents become final and the other provisions of the MoU become effective,” the statement reads in part.
Brain Glover the General Manager Tullow Oil Uganda told journalists in Kampala today that with the signing of these SPAs, a key condition of the Memorandum of Understanding (MoU) agreed between Tullow, the Government of Uganda (GoU) and the Uganda Revenue Authority (URA) on 15 March 2011, has been satisfied. He said the SPA with CNOOC and Total will allow the companies to jointly construct the $10billion oil refinery in Uganda.
“ Tullow, its partners and the Government of Uganda will now agree a development plan for the Lake Albert Rift Basin with a target of delivering production of at least 200,000 bopd and potentially much more as we continue to explore and appraise the basin. We are looking forward to working with CNOOC and Total, and continuing our strong relationship with the Government to bring the benefits of the oil to the people of Uganda,” Aidan Heavey, Chief Executive of Tullow Pls said yesterday.
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