Uganda oil production edges closer
A three-way deal between major oil producers could hasten the start of oil production in Uganda.
A signing ceremony between Tullow Oil, Total and CNOOC, is set to move Uganda's struggling oil industry another step closer to production. The deal - a merger termed as a "farm down" - will allow Irish-based African oil corporate, Tullow, to work with the financial and technical strength of the French and Chinese companies to develop Western Uganda's oil fields.
Tullow, until now the interim operator of the fields, has brought three oil blocks to the point of production after the initial exploration phase.
However, there are still considerable hurdles to overcome before Uganda can be seen as an oil producing nation. The trio are still to gain a production licence from the country's government and with no transportation or refining infrastructure moving the oil will be a challenging process.
Even though the barrel price or sale structure is yet to be agreed, Total are already set to begin operations, using 50 expatriate staff and nearly 300 local employees, with offices and equipment being acquired.
