UK independent Tullow Oil had finally been awarded three production licenses by the Ugandan government, clearing the way for a stalled farm-down deal in the East African country.
Tullow said Friday it has signed PSAs with the Kampala government for the EA-1 and Kanywataba licences in the Lake Albert Rift basin, and has also been awarded the Kingfisher production licence.
The company’s proposed $2.9 billion sale of stakes in three blocks to China National Offshore Oil Corporation (CNOOC) and France’s Total was reported recently to have snared on disagreements over contract clauses.
“As a result of this signing, Tullow will now finalise arrangements with CNOOC and Total for completion of the farm-down and the related transfer of monies as soon as possible,” the company said.
The deal is expected to ultimately unlock US$10 billion worth of investments, which include Uganda's first refinery and a pipeline to the Indian Ocean, in the country's nascent oil sector.
Ugandan geologists have indicated that there could be as much as six billion barrels of oil in the country.
About 1.1 billion barrels of proven and probable (P50) resources have been discovered in the Lake Albert Rift basin, with an additional 1.4 billion of P50 volumes identified, according to Tullow’s website.
Oil News | East Africa
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