By Nicholas Bariyo
KAMPALA Uganda--Tullow Oil's new sales process to reduce its stake in Uganda's Lake Albert oil project must fulfill the country's tax obligations, Uganda's energy and minerals ministry said Friday.
The UK-based energy company said Thursday that its plans to sell a stake in its project in Uganda, which produces 230,000 barrels of oil a day, to Total and CNOOC has been called off because it had been unable to reach certain agreements on taxes with Ugandan authorities. Tullow added that it plans to begin a new sales process to reduce its 33.33% stake in the assets.
But Ugandan authorities said tax obligations on the sale must be complied with, in accordance with Ugandan laws.
Uganda's latest stance could re-establish a standoff that has stalled the $900 million deal, initiated in 2017.
"We are ... confident that as Tullow moves to re-initiate a new sales process the joint-venture partners will remain committed to fulfilling their tax obligations," Robert Kasande, the ministry's permanent secretary, said in a statement. Mr.Kasande added that the government would continue working with the joint-venture partners to ensure the final investment decision on the projects is achieved at the earliest time, "in a manner that safeguards the country's interests and sovereignty."
Another standoff could potentially hamper the development of Uganda's already delayed oil fields, estimated to contain some 6 million barrels of crude.
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