Ugandan President to revisit Tullow’s stalled deal

13 October 2011, Sweetcrude, Kampala – Ugandan President Yoweri Museveni plans to bring the issue of Tullow Oil’s stalled $2.9 billion farm-down plans in the country up with party members.

Museveni stepped into the UK independent’s woes for the second time in a fortnight, saying he is to discuss the outcome of Tuesday’s vote which asks the government to block the completion of farm-down deals in three key Albertine Graben blocks.

“I will invite my NRM (National Resistance Movement) members and we’ll discuss this issue first,” Museveni said at a news conference.

“I know how to defend the interests of Uganda. Uganda will not lose. I will give a position after I have talked with my members.”

London-listed Tullow is looking to retain a stake of just a third in the three blocks while remaining operator of just one with Total and CNOOC envisaged as each also operating one.

Museveni effectively blocked the deal at the end of September when he wrote to the partners expressing concern that the proposed stabilisation clause could restrict Uganda’s share of oil revenue if prices increase significantly after production comes on stream.

Local sources suggest the underlying concern is a fear that Tullow may not have provided sufficient assurance to the government that it would benefit from rising oil prices, and Museveni’s remonstration seems to have united politicians and lobby groups behind his stand.

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