Uganda awaits formal oilfield deal from firms

Uganda's oil minister said Kampala was waiting for documents about the sale of Heritage Oil's assets, and stressed that neither Heritage nor partner Tullow Oil had consulted the government on the deals.

Tullow has exercised a right to buy Ugandan oil fields from Heritage, potentially derailing ambitions to expand in Africa by Italy's Eni, which had previously agreed to buy them for up to $1.5bn.

“The government has not formally received documents pertaining to that sale. Once we receive the documents, we're going to look through them and decide to approve it or not,” Minister Hillary Onek told reporters.

“Neither Heritage consulted with us about the deal with Eni nor did Tullow consult with us about the pre-emptive right.”

Heritage owns half of Block 1 and half of Block 3A, which is located in the oil-rich Albertine Graben region in western Uganda where foreign explorers have estimated that they have found more than two billion barrels of crude reserves.

Tullow – which last year started a process to sell up to 50 percent of its own Ugandan assets, with a buyer expected to be selected early this year – owns 50 percent in Block 1 and 3A and also 100 percent of Block 2.

Interest from larger oil firms is heating up for Uganda's oil reserves. Kampala plans to resume licensing exploration companies at the end of this year after it halted the process in 2007 to come up with an oil and gas law.

Around 8,000 square km (3,089 square miles) is unlicensed.

Onek said Uganda could accommodate two or three large companies, and that the government would not “be held for ransom” by a monopoly of its oil sector.

Last week, Italy's Foreign Minister Franco Frattini said that he discussed the Eni deal with senior Ugandan officials.

The Italian firm has argued it has the skills to help develop the project which would require the construction of crude processing facilities and a heated pipeline.

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