By Spy Uganda
The future for Uganda’s Oil sector is once again bright, after President Yoweri Museveni revealed that he is set to hold talks with Total and CNOOC to sort out issues regarding their agreements.
Museveni said that he is in touch the executives of oil companies and had expected to meet with them at the United Nations General Assembly to discuss the current impasse in the sector and chart a way forward, but time didn’t allow.
Museveni, who was speaking at the 5th Oil and Gas Summit at Serena Hotel in Kampala on Wednesday evening, said he expected to resolve their issues.
Museveni said that “I was supposed to meet them in New York but I had more important issues to do here. We shall resolve their issues,”
Museveni added that “Coming late [to production] is also good because you find when other people have made mistakes and you benefit from them by not repeating the same mistakes.”
Uganda currently has confirmed 6.5 billion barrels of oil with about 1.4 billion – 1.7 billion barrels commercially viable. Actual production is expected in 2023.
However, this is the first time Museveni is speaking about the companies since the collapse of deal where Tullow Oil was expected to sell part of its interests in the Albertine Graben to Total E&P and China National Offshore Oil Company-CNOOC.
The deal collapsed after the two-year period for negotiations expired. The companies failed to agree with the government on tax and how much money must be counted as recoverable costs.
Tullow was expected to transfer 21 per cent of its 33.3 per cent in Kingfisher Blocks to Total and CNOOC. Had the deal been completed, it was expected to pave way for the conclusion of the Final Investment Decision (FID). This would mean that projects like the oil pipeline and the refinery would kick-off.
Following the collapse of the deal, Total E&P suspended technical activities on the pipeline and laid off a number of staffs. CNOOC also laid off some staff. But technocrats from companies and politicians went behind the scenes to push for the reopening of the talks for the oil companies to conclude the deal.
