LONDON, March 30 (UPI) -- A purchase agreement between Chinese and French energy companies marks a new dawn for oil production in Uganda, a company executive said.
Tullow Oil announced that it signed a sale and purchase agreement with French energy company Total and state-owned China National Offshore Oil Corp. regarding the sale of a one-third interest to each party.
Tullow Chief Executive Officer Aidan Heavey said the agreement secured the future of oil production in Uganda.
"Tullow, its partners and the government of Uganda will now agree a development plan for the Lake Albert rift basin with a target of delivering production of at least 200,000 barrels of oil per day and potentially much more as we continue to explore and appraise the basin," he said in a statement.
Tullow must now ensure tax-related payments to the Ugandan government outlined in a memorandum of understanding signed March 15.
"With this acquisition, we have entered a new oil province, giving us access to substantial proven resources and high-potential acreage," added Total's exploration chief Yves-Louis Darricarrere in his statement. "The size of the discoveries indicates that large-scale development may be possible."
Heritage Oil in 2009 agreed to sell its Ugandan holdings to Italian energy company Eni. Tullow had the right to pre-empt the deal, however, and in early 2010 the Ugandan government said it backed Tullow's plans despite a lobbying campaign by Eni to stop the transaction.