Tullow partners with CNOOC, Total to develop oil sector in Uganda

09:52, February 18, 2010      

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Tullow Oil has decided to partner with China National Offshore Oil Corporation (CNOOC) and France's Total to develop oil sector in western Uganda, a Ugandan official said on Wednesday.

Fred Kabagambe Kalisa, the permanent secretary of ministry of energy and mineral development said out of 11 companies who expressed interest in Tullow's assets in Uganda, the London-based oil company selected CNOOC and Total as its joint partners.

Tullow exploring oil in western Uganda early this month reached an agreement with former partner Heritage Oil, to take over the latter's 50 percent stakes in two blocks exercising pre-emption.

Appearing before the natural resources committee in the Parliament, Kalisa said Tullow has been asked to submit the joint operating agreements and sales purchases agreements for review.

"The farming in partners, CNOOC and Total have been invited to present their plans for development to government," said Kalisa.

"The approval for the partners to join the licenses shall be made only upon confirmation that the partnership addresses the country's interests," he said.

There was concern from top energy officials over monopoly after Tullow successfully secured full control of two oil blocks by blocking Italy's Eni's offer to Heritage. But Tullow ruled it out by partnering with other companies to develop Uganda's fledging oil industry.

"We need to avoid the monopoly situations to enable the country to benefit from a competitive and innovative environment in the sector. Competition brings transparency and could enhance transactions proceeds," said Kalisa.

He said Uganda requires significant investment of 8 billion U.S dollars within the next 10 years to develop the oil and gas industry in the country.

"The government should quickly move with the formation of national oil company so as to increase national participation, especially in commercial aspects of the oil and gas sector."

So far, about 800 million barrels of oil were found in three blocks owned by Tullow in western Uganda and another 1.5 billion barrels remained to be found, according to the company's estimates.

Source: Xinhua
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