KAMPALA, Uganda - The Ugandan government has appointed a panel to oversee development of the oil-rich Lake Albertine rift basin, where production is expected to commence in the next couple of years.
The move, which follows talks between President Yoweri Museveni and the three oil companies working in the area, will allow for a Basin Development Plan. The government will have to approve this before any development commences.
Details of who is on the panel aren't yet known.
President Museveni met with executives from U.K.-based Tullow Oil PLC (TLW.LN), France's Total SA (TOT) and China's Cnooc Ltd. (CEO), who are currently in advanced stages of beginning a $10 billion development plan for the basin.
"The meeting was aimed at addressing various issues including outlining the operators vision for the basin wide development…and target signature of a joint development agreement between government and operators," the spokeswoman said.
The development underscores Mr. Museveni's attempts to maintain a firm grip on Uganda's nascent oil sector. In 2009, he issued a directive prohibiting the energy and minerals minister from signing oil deals without presidential approval.
Earlier this week Tullow said that major oil production from the basin, estimated at more than 200,000 barrels a day, is expected approximately 36 months after the development plan has been approved. Tullow holds a 33% stake in three blocks in the basin.
Since the completion of Tullow's long delayed sale of two thirds of its stakes in the oil blocks in February, exploration and appraisal activities have been ramped up. At least four rigs are currently active.
Each of the three companies operate a separate block, but will operate a joint central processing unit and a refinery. Landlocked Uganda will also require a 1,300-kilometer pipeline to the Kenyan port of Mombasa for projects.
Copyright (c) 2012 Dow Jones & Company, Inc.
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