France-based Total SA (TOT)and China's Cnooc Ltd. (CEO) this week presented their final development proposals for three Ugandan oil blocks to Uganda's government, and a government decision on the plans is expected before the end of March, people familiar with the process told Dow Jones Newswires Friday.
France-based Total SA (TOT)and
China
's
Cnooc Ltd. (CEO) this week presented their final development proposals for
three Ugandan oil blocks to
Uganda
's
government, and a government decision on the plans is expected before the end
of March, people familiar with the process told Dow Jones Newswires Friday.
A government official said that Total was the first to make a presentation to
the government on Tuesday this week, and this was followed by Cnooc on
Wednesday. U.K.-based Tullow Oil PLC (TLW.LN) has nominated the two companies
as potential partners for developing three
Lake Albert
oil
blocks where more than 1 billion barrels of oil have been discovered.
Tullow is awaiting government approval to purchase a 50% stake in two blocks
that are currently owned by U.K.-based Heritage Oil PLC (HOIL.LN). If
successful, Tullow--which already owns the remaining 50% stake in the two
blocks, and all of a third, neighboring block--would have full ownership of all
three blocks, but has said it will bring in one or more partners to develop the
assets.
A decision to allow Tullow to take over Heritage's interests in two Ugandan
blocks is subject to the "agreeable" development proposals of
Tullow's potential partners, according to Kalisa Kabagambe, the permanent
secretary at the ministry of energy and minerals development. The Ugandan
government has insisted that any deal must be in the interests of the country.
"The meetings between government and the companies are now over, but there
are a lot of legal documents to be signed," the government official said
Friday. Total could not comment immediately, while Tullow and Cnooc declined to
comment. Cnooc Ltd. is the Hong Kong-listed unit of China National Offshore Oil
Corp.
Tullow, Cnooc and Total are now expected to sign sales and purchase agreements,
as well as a cooperation agreement, with each other. The agreements will then
be forwarded to the Ministry of Energy and Minerals Development, as well as the
attorney general, before a final approval, the official added.
Last month, the Ugandan government invited Cnooc and Total to make individual
presentations on their development proposals.
Kabagambe last month told lawmakers sitting on
Uganda
's
Natural Resources Committee that the approval for the partners to join the
licenses shall be made only upon confirmation that the partnership addresses
the country's interests. Government wants the three oil companies to operate
one block each in order to avoid a monopoly. According to government, at least
$8 billion is required for the development of the country's oil sector in the
next 10 years.
Cnooc and Total have both expressed interest in building a refinery in
Uganda
, and
an export pipeline to the East African coast.
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