L. Albert oil project final investment decision now expected in June

Kampala, Uganda | THE INDEPENDENT | A Final Investment Decision (FID) for the Lake Albert Oil and Gas project is expected to be concluded by mid this year, according to Tullow Chief Executive Officer Paul Mcdade.

The government has been banking on the Joint Venture Partners, Tullow, China National Offshore Oil Corporation-CNOOC and Total to make a Final Investment Decision with regard to the project, to unlock value in the country’s oil and gas sector.

The delay by the Joint Venture Partners to reach a Final Investment Decision has partly been the reason why the government shifted the time for the First Oil from 2020 to earliest 2022.

Without giving details Mcdade said the Joint Venture partners are targeting Uganda’s Final Investment Decision around mid-year and a Final Investment Decision for Kenya at the end of 2019. He made the remarks as part of the company’s 2018 full year results announced on Wednesday.

Stanbic Bank Chief Executive Officer Patrick Mweheire said the Final Investment Decision by the Joint Venture Partners could unblock the oil and gas sector. And thereby boot the banking and entire economy.

In a related development, Paul Mcdade said that his company and the Government of Uganda have agreed on the principals for Capital Gains Tax as part of the final stages for the farm-down of part of its stake in Uganda to Total and China National Offshore Oil Corporation-CNOOC.

Tullow Oil Uganda is required to pay over 614 billion Shillings (USD 167 million) Capital Gains Tax to the government for it to the sale of assets to Total E&P and China’s CNOOC. Tullow has for the last two years been negotiating to transfer 21.57 per cent of its assets to Total E&P and CNOOC at USD 900 million (about 3.4 trillion Shillings).

Energy Minister Irene Muloni in November last year granted the three partners a conditional consent to the farm-down transaction once the Capital Gains Tax had been paid to URA.

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