KAMPALA - Uganda wants
British oil explorer Tullow Oil, France's Total and Chinese group CNOOC
to drop a clause shielding them from sudden changes in policy before
approving a $10 billion oil project, sources said on Monday.
Tullow has been waiting since last year to finalise an agreement
to bring in new partners Total and CNOOC to start the oil development
project in western Uganda and had expected completion this month.
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| Oil rig in Western Ouganda |
"The government of Uganda has written to the three companies and
wants them to strike out the so-called stabilisation clause," Angelo
Izama, director of Fanaka Kwawote (FK), a Kampala-based energy
think-tank, told Reuters on Monday.
"Then Uganda will sign the (Production Sharing Agreement) and endorse the joint venture," he said.
A source at one of the companies confirmed the Ugandan government's demand.
All existing Production Sharing Agreements (PSAs) in Uganda have a
stabilisation clause that insures exploration companies against adverse
changes in taxation policy and outbreaks of political turmoil, Izama
said.
"It's going to be difficult for companies to accept this.
Deleting the stabilisation clause would mean companies would find it
hard to raise capital because of elevated risk," he said.
Under the proposed deal, completion would see Tullow's new
partners pay it $2.9 billion to become involved in the development of
massive oil fields around Lake Albert.
The east African nation had provisionally given the green light
to the deal, which has been held up by an ongoing wrangle over capital
gains tax now being played out in a London court.
Uganda struck commercial hydrocarbon deposits in the Albertine
rift basin along its border with the Democratic Republic of Congo in
2006 and production was expected to commence next year.
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