Govt takes oil block back from Tullow,CNOOC

Uganda has taken back an exploration block jointly owned by Tullow Oil, CNOOC and Total SA after their licence expired, the government said, likely increasing the acreage up for auction in a new licensing round expected early next year.

The Ugandan Energy Ministry's Petroleum Exploration and Production Department (PEPD) said the Kanywataba block had reverted back to the east African government after a six-month long exploration license expired.

The three companies entered into a partnership in February after France's Total and China's CNOOC bought into London-listed Tullow's exploration assets in the country for a total of $2.9 billion.

"Kanywataba prospect area ... reverted to government following the expiry of the six months exploration licence which was issued to Tullow in February 2012," said the undated statement seen by Reuters on Wednesday.

There was no immediate reaction from CNOOC, which operated the block, Tullow or Total. Tullow declined to comment while an email to CNOOC was not immediately answered.

Uganda discovered commercial hydrocarbon deposits in the Albertine rift basin along its border with the Democratic Republic of Congo (DRC) in 2006. The government estimates reserves at 3.5 billion barrels.

Total has said commercial production from other blocks is likely to start around 2017 with peak output, estimated at between 200-230,000 barrels of oil per day, seen in 2020 or 2021.

CNOOC drilled a single well in the Kanywataba block in May but did not strike oil, Uganda said, adding it remained optimistic the block held oil.

"This area, which is undergoing restoration, remains prospective and will be available for future licensing after the new legislation is passed by parliament," the statement said.

Uganda is currently waiting for three bills to be passed to strengthen management of its nascent oil industry. However, parliamentarians say new laws are being delayed by disagreements between them and the president.

Tullow, Total and CNOOC are awaiting government approval of their proposed development plans for the Albertine rift basin which will pave way for multi-billion dollar investment to build infrastructure to enable

Reuters