Country Report Uganda March 2010

Economic performance: Chinese and French oil giants enter the Ugandan oil industry

A UK-listed company, Tullow Oil, is seeking to enter into partnership with both the China National Offshore Oil Corporation (CNOOC) and the French oil giant Total, bringing an end to a degree of uncertainty that has been present in the fledgling oil sector since Tullow exercised its right to buy out its partner, Heritage Oil (February 2010, Economic performance). Fred Kabagamba Kaliisa, the permanent secretary at the Ministry of Energy, told the parliamentary natural resources committee that the three companies had been invited to submit their development plans to the government. He also called for the formation of a national oil company to increase Uganda's participation in the exploitation of its oil resources. The involvement of three large multinationals reflects the large potential as well as the high costs of getting the oil to market in Uganda and the significant investment this will require. The latest government estimates forecast medium-term development costs of US$8bn; US$200m for further drilling, US$300m for power generation and transmission, US$1.5bn for oil processing and transportation equipment, US$2bn for refinery construction and US$4bn for storage and pipeline infrastructure. The authorities will have been encouraged by the announcement from the chief executive officer of Tullow, Aidan Heavey, that the current production target of 150,000 barrels per day (b/d) could be more than doubled to 350,000 b/d by 2018 "if the right development plan is selected".

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