Tullow, govt to sign agreement

By Vision Reporter

UGANDA has agreed with explorers in western Uganda 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.

Speaking during the farewell party for long-time chairman of Tullow’s Uganda unit Elly Karuhanga, 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 licenses, from Tullow, CNOOC and Total. We have already granted a production license to CNOOC and we expect to grant production licenses to Tullow and Total in the next six months,” she said.

Tullow’s executive director Graham Martin commended Karuhanga for his dedication to the business, wise counsel and insights into the country’s workings. Karuhanga has served as president and director of Tullow Uganda Operations and was senior advisor - Africa, for Tullow Oil between 2005 and December 31, 2013 when he retired.

He is also the chairman of the Uganda Chamber of Mines and Petroleum.