Signing Of Uganda-Tullow Venture Delayed On Latest Disagreement

Fox Business reported that Uganda is contesting its current oil agreement with U.K.-based Tullow Oil PLC (LON:TLW) in the dispute to delay the $2.93 billion sale of its stake in three oil blocks to Total SA (NYSE:TOT) and China’s CNOOC (NYSE:CEO).

The market news is quoted as saying:

President Yoweri Museveni sent a directive blocking the signing of the agreement, which was originally scheduled for Sept. 15, according to two people familiar with the matter. Museveni opposes a “stabilization” clause in the agreement that the country fears could limit its share of additional cash if oil prices rise significantly from today’s level.

Uganda is also currently locked in a long-running dispute with U.K.-based, Heritage Oil PLC (HOIL.LN) over a $405 tax bill emanating from its $1.45 billion sale of its assets in Uganda to Tullow last year. The Ugandan government gave a conditional approval of the Tullow, CNOOC and Total joint venture in April. Upon the conclusion of the transaction Tullow will operate block 2, and transfer the operation of blocks 1 and 3A to Total and CNOOC respectively.

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