September 6, 2018 / 10:42 AM / 2 months ago

Uganda's national oil firm, China's CNOOC sign exploration deal

FILE PHOTO: Ugandan President Yoweri Museveni attends an African Union summit in Addis Ababa, Ethiopia, Jan. 28, 2018. REUTERS/Tiksa Negeri/File Photo

KAMPALA (Reuters) - Uganda said on Thursday its national oil firm and Chinese offshore oil and gas company CNOOC Ltd (0883.HK) had signed an agreement to jointly conduct exploration in a new block in the East African country.

The deal was signed in Beijing on the margins of the ongoing China-Africa forum on cooperation, which is being attended by Uganda’s President Yoweri Museveni.

A statement issued by his office said CNOOC and Uganda National Oil Company signed a memorandum of understanding “to jointly explore a new oil and gas block in the Albertine Graben, on the southern part of Lake Albert.”

“The exploration aims to increase the amount of crude oil produced in Uganda to support the operations of the refinery as well as the oil pipeline,” it said.

Uganda is expected to start crude production in 2021 in the Albertine rift basin near the border with Democratic Republic of Congo, where reserves estimated at 6.5 billion barrels were discovered more than a decade ago.

CNOOC already operates in Uganda, jointly owning fields with France’s Total (TOTF.PA) and London-listed Tullow Oil (TLW.L).

The statement did not say which block would be jointly explored but authorities are keen to increase exploration activity in the wider, lower part of the Albertine rift after successful discoveries in the northern part.

Landlocked Uganda aims to both export crude via a pipeline through neighbouring Tanzania and also domestically process a portion of the output at a refinery planned for development near the oil fields.

Reporting by Elias Biryabarema; Editing by Aaron Maasho and Mark Potter

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