Tullow Oil says too early for new FID date on oil project as Energy Minister reveals govt has solution

Tullow Oil Uganda Operations Tullow Oil has said it is still too early to give a new timeline on a final green light for investment in Uganda’s first oilfields, Tullow Oil Chief Executive Paul McDade said on Wednesday, reiterating the company’s plan to sell down its stake to TOTAL and CNOOC in US$900 million transaction that still hangs in balance over tax issues.

“We will not make an FID (final investment decision) on the project at the current equity,” McDade told news agencies. “To get the right conditions to sell down more of the project, we need more certainty over the progress towards FID.”

Tullow’s plan to sell another stake in its 230,000 barrel per day project in Uganda to France’s Total and China’s CNOOC, already partners in the fields, was called off in August due to a tax dispute with the Government of Uganda which wants to earn more tax revenue than what companies are willing to give.

Energy Minister Eng. Irene Muloni said on Wednesday she was optimistic the government can resolve a tax dispute with oil companies in time to get first oil flowing by 2023.

Muloni said yesterday in South Africa that she expected a final investment decision (FID) from oil companies Tullow, France’s Total and China’s CNOOC by the end of the first quarter next year on an oil export pipeline through neighbouring Tanzania.

Muloni said the government had offered a solution. “We have engaged with the companies. We have offered to them a solution,” Muloni said at the Africa Oil Week conference in Cape Town.

“We are hopeful that between now and the end of the year they will re-engage to try to find a solution,” she said, adding that it would enable first oil through the pipeline by 2023.

Tullow’s plan to sell a stake in the project to partners Total and CNOOC was called off in August after the firms failed to reach agreement with Ugandan tax authorities on the tax relief on money Total and CNOOC would have paid to Tullow.

Once pipeline construction begins, Muloni said it would take about three years to complete.

Meanwhile Muloni has invited bidding on five blocks, speaking at an African oil conference in Cape Town.

Muloni added that she was keenly awaiting companies to take a final investment decision regarding the construction of an oil export pipeline through neighbouring Tanzania.In January 2017, Tullow announced that it had agreed a substantial farm-down of its […]

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