Uganda to sign energy deal with oil explorers soon

Uganda government has agreed with explorers in the western part of the country on a basic framework for the commercial exploitation of oil in the Lake Albert region. Singing it off should come in the first half of this year, the energy minister said last week. Since the establishment of commercially viable quantities of oil in 2006, the government has been negotiating with UK-based oil explorer Tullow, France’s Total and China’s CNOOC on the most appropriate way of exploiting the estimated 3.5 billion barrels in the Albertine region. “The government, Tullow, CNOOC and Total have agreed on all the elements of a commercial framework memorandum of understanding that consists of a value chain in which the upstream production feeds into an optimally-sized refinery, a crude export pipeline and a crude to power plant for electricity generation,” energy minster Irene Muloni said over the weekend. The minister added that the agreement is key to getting financing for the project leading to eventual production. “During 2013, the Petroleum Exploration and Production Department of the energy ministry received 10 field development plans and 10 applications for production licences from Tullow, CNOOC and Total. “We have already granted a production licence to CNOOC and we expect to grant production licences to Tullow and Total in the next six months,” Muloni said. Last year, Tullow published a 21-page report on Uganda, tracking progress since it entered the country in 2004. The company said it has uncovered more than one billion barrels of oil in Uganda since operations began and most of that was in the country’s Lake Albert basin. In early January, the Ugandan government said Tullow’s national subsidiary submitted its application for eight production licences in the so-called Albertine Graben basin. French energy company Total and China National Offshore Oil Corp. submitted applications for the other licenses.