KAMPALA, Uganda--The government of Uganda has reached a deal
with foreign oil companies to develop its oil sector, the country's
energy and minerals minister said Friday, ending a nearly
three-year impasse and opening the way for a $15 billion
investment.
The government has agreed the terms of a Memorandum of
Understanding with U.K.'s Tullow Oil PLC (TLW. LN), France's Total
SA (TOT) and China's Cnooc Ltd. (CEO) for the commercialization of
the oil sector.
The plans consists of a 60,000 barrels-day refinery, a crude
export pipeline to Kenya's northern port of Lamu and a crude-fired
electricity plant in Uganda's oil region, Irene Muloni said in a
statement obtained by The Wall Street Journal Friday.
The development paves way for a multibillion-dollar investment
to develop the country's oil fields, which are believed to contain
up to 3.5 billion barrels of crude.
Uganda contains sub-Sahara Africa's fourth-largest amount of oil
reserves, behind South Sudan, Angola and Nigeria. "[The]
Government, Tullow, Cnooc and Total have negotiated and agreed all
the elements of a commercial framework," Ms. Muloni said. "This is
a significant milestone since the market framework is critical for
the commitment of project financing."
Tullow, Cnooc and France's Total) are equal partners in a
venture to develop all 20 fields, with each operating one of three
blocks of the reserves.
Graham Martin, Tullow's executive director said separately that
Uganda is one of the countries at "the core" of the company's
exploration and production business strategy. "We expect production
in Uganda to average 220,000 barrels a day, drawing from
recoverable reserves of 1.7 billion barrels."
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com
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