Business News

Uganda clinches oil agreement with foreign firms

Mar 15, 2011, 16:56 GMT

Kampala - The Ugandan government Tuesday sealed an agreement with a consortium of foreign firms led by Britain's Tullow Oil PLC to extract oil and gas from its 2.5-billion-barrel western oil fields.

The memorandum of understanding is designed to resolve a long- running tax dispute involving the consortium, which also includes Heritage Oil, Total of France and the China National Offshore Oil Corporation.

'After many months of discussions, the government and Tullow Oil PLC are delighted to announce that a memorandum of understanding has been signed today which satisfies the government's concerns,' Energy Minister Hillary Onek told reporters.

'We look forward to an early production to strengthen our economy and reduce energy tariffs,' he said.

Uganda first discovered commercial deposits of oil in 2006. Since then, hundreds of millions of dollars have been invested in exploration ventures in the oil-rich Albertine Region, which straddles Uganda's western border with the Democratic Republic of Congo.

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