UPDATE: Uganda President Meets Tullow Executives As Deal Nears Approval
November 17 2011 - 10:27AM
Dow Jones News
The Ugandan president held talks with the chief executive of
U.K.-based Tullow Oil PLC (TLW.LN), Aidan Heavey, Thursday to
discuss final details of the company's planned sale of two thirds
of its stakes in the country's main oil resource to France's Total
SA (TOT) and China's Cnooc Ltd. (CEO), officials said Thursday.
President Yoweri Museveni held closed door talks with Heavey at
the statehouse in Entebbe over Tullow's long-delayed $2.9 billion
sale of its assets in Uganda's Lake Albertine rift basin, according
to a government official with direct knowledge of the
situation.
"The president still has some slight concerns with the
stabilization clauses of the joint venture oil production
agreement," said the official, who did not want to be named. "But
these should be one of the last meetings."
A Tullow spokesman, George Cazenove, confirmed the meeting.
"Mr. Heavey is in Uganda to meet staff as part of a end-of-year
trip to various Tullow operations in Africa. He paid a courtesy
call on President Museveni this morning," he said in an emailed
statement.
According to Ugandan officials, Total executives led by the
chief counsel, Mary Begg-Safar are also scheduled to meet the
president this week. Total could not comment immediately.
The talks underscore the determination of both government and
company officials to conclude the long-delayed deal, which is
expected to unlock at least $10 billion worth of investments in the
country's oil sector.
Last week, the Ugandan leader rejected parliament's resolutions
to delay the deal, saying that the move is likely to undermine the
credibility of the government and hurt future investments in the
country's nascent oil and gas sector.
According to Angelo Izama, an analyst with a Ugandan-based
research group, Fanaka Kwawote, the Ugandan government is keen to
conclude the deal and collect taxes on the transactions in order to
strengthen the local currency.
"It is in government's interest to conclude this deal before the
end of the year," he said.
The Ugandan local currency has depreciated by at least 15% since
the start of the year, a move detrimental to the country's
inflation rate.
During a parliamentary debate Oct. 11, lawmakers across the
political divide voted to ask the government to withhold consent
for Tullow's planned sale to Cnooc and Total, until all necessary
legislation is put in place to regulate the sector.
Tullow, which had hoped to complete the transaction in
September, said last week that it expected government approval
shortly.
-By Nicholas Bariyo, Dow Jones Newswires; 256-75-2624615;
bariyonic@yahoo.co.uk
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