- Trade - Governance - Oil
Uganda gets tough on rivaling foreign oil companies
The government of Uganda has threatened to throw out rivaling oil companies in the country if their disagreements threaten the exploration of oil in the country.
While addressing the press Thursday in Kampala, Uganda’s minister of Energy announced that his government supports the sale of Heritage Oil and Gas’ shares to Eni Spa, an Italian company.
The announcement has put an end to business wrangles between Tullow Oil Plc and Heritage oil company. The former had refused the latter the right to sell the shares to another company.
“The oil resources in Uganda and indeed all other mineral resources belong to the people of Uganda, and government as the custodian of these resources has a duty to ensure that they are harnessed and developed for the benefit of its people”, the minister said.
“If the two companies disagreed, it will not have an impact on the government. If they squabble among themselves, or quarrel, I will not hesitate to invoke their license in the oil exploration. If they become a nuisance or involved in courts, I will throw them out. We cannot allow the delay in the oil exploration”, he said.
He added that “we cannot allow a monopoly situation by one company in the Albnertine Graben.
Heritage Oil and Gas has 50% stake in oil exploration in several areas near lake albert in western Uganda. Heritage concluded a sales agreement of its interest in the two exploration areas with Eni Spa. The two companies have agreed on a sale price of US1.5 billion. The transactions would be subject to a capital gains tax.
“Government received the proposed sale of Heritage’s assets in the country to Eni and has been informed of Tullow’s preemption of this transaction. Government supports the Heritage-Eni deal process. Government will also support any other similar process provided the process does not create a monopoly, enhance early production and value addition”, he said.