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Uganda’s oil may take longer to realise

Business

Uganda’s oil may take longer to realise

Oil rigs are rusting

Total E&P the French company that together with China’s CNOC own the largest share of Uganda’s oil reserves, says the dispute with Uganda’s authorities over taxes on the sale of a stake by British company Tullow is keeping them from making the Final Investment Decision , Reuters news agency has reported.

Total’s Chief Finance Officer Jean-Pierre Sbraire has been quoted saying that although the company remains committed to the country, the tax dispute between and Uganda is keeping them away from making the FID.

“The project is technically mature. We are ready to launch but we recently faced some difficulties with the authorities,” Sbraire said.

Total had planned to buy some of Tullow Oil’s stake in the 230,000 barrel-per-day project but that deal was called off due to a tax dispute with the Ugandan authorities.

“We remain fully committed to the development but we’ll see, at present time it is a bit too early to assess when the final investment decision (FID) could be taken for the project,” Sbraire said.

The FID is a detailed plan by an international oil company that spells out how it plans to develop the oil resources, how many people it may need to employ, what resources it may need etc.

The delay by Total and CNOOC to make the FID has devasted many local companies which has hired or borrowed money in anticipation to supply goods and services in time when time for field development comes.

The delay also has further implications on Uganda’s debt stock which is rising very fast and government had hopped to repay using oil money.

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