Kampala, Uganda | THE INDEPENDENT | President Yoweri Museveni has said that he is in touch with the executives of oil companies and will meet them soon to discuss the current impasse in the sector.
Museveni, who was speaking at the 5th Oil and Gas Summit at Serena Hotel in Kampala on Wednesday evening, said he was confident a way forward will be agreed at the upcoming meeting.
“I was supposed to meet them in New York but I had more important issues to do here. We shall resolve their issues,” Museveni told delegates.
This is the first time Museveni is speaking about the companies since the collapse of a deal where Tullow Oil was expected to sell part of its interests in the Albertine graben to Total E&P and China National Offshore Oil Company-CNOOC.
The deal fell apart after the two year time for negotiations expired. The companies failed to agree with the government on tax and how much money must be counted as recoverable costs.
Tullow was expected to transfer 21 per cent of its 33.3 per cent in Kingfisher Blocks to Total and CNOOC. Had the deal been completed, it would have paved way for the conclusion of the Final Investment Decision (FID). This would mean that projects like the oil pipeline and the refinery would kick-off.
After the collapse of the deal, Total E&P suspended technical activities on the pipeline and laid off a number of staff. CNOOC too laid off some staff as technocrats from both companies and politicians went behind the scenes to push for the reopening of the talks to conclude the deal.
At Serena, Museveni said he had “already squeezed oil companies quite reasonably” and no one is going to see the mistakes that countries started producing oil earlier made, being repeated here.
“Coming late [to production] is also good because you find when other people have made mistakes and you benefit from them by not repeating the same mistakes,” Museveni said.
He was optimistic, saying “As we speak now, there are 6.5 billion barrels confirmed in the Albert Valley…We may find some more oil to add to the 6.5 billion barrels.”
Irene Muloni, the minister of energy, said the summit would allow Uganda to highlight the opportunities around the 2nd round of licensing that the country announced in May. The country has called for bids for the new blocks for oil exploration.
Uganda currently has confirmed 6.5 billion barrels of oil with about 1.4 billion – 1.7 billion barrels commercially viable. Actual production is expected in 2023.