By NICHOLAS BARIYO
KAMPALA -- Cnooc has expressed interest in investing in Uganda's oil refinery and a crude export pipeline, as the east African nation prepares to develop its fledging oil sector.
Uganda's presidency said in a statement that the Chinese company expressed interest in the two projects following a meeting between company chairman Wang Yilin and Uganda's prime minister Amama Mbabazi, who is on a week-long state visit to China.
Cnooc together with Tullow Oil and Total are in the process of developing Uganda's oil fields in the Lake Albertine Rift basin. Cnooc becomes the first company among the joint venture partners to express interest in the two projects, since Uganda announced that it would approve the construction of a smaller refinery and a crude export pipeline more than two months ago.
The two projects are expected to cost more than $6 billion, according to government estimates.
The Ugandan presidency quoted Mr. Yilin as saying that Uganda's nascent oil and gas sector would "lay a better foundation for other industrial efforts." A Cnooc spokeswoman in Uganda couldn't immediately be reached.
Uganda agreed with the companies in April on the construction of a 30,000 bpd and a crude export pipeline, breaking a nearly-two year impasse, largely blamed for delaying the development of the country's oil sector.
Tullow said that it had made "substantial progress" with its partners and the government and expects to sign a memorandum of understanding for the development of the country's oil fields.
The three companies are expected to invest more than $12 billion to develop the oil fields, which are believed to contain as much as 3.5 billion bbl of crude, with less than 40% of the country's oil region explored so far.
"Our desire is not just revenues but achievement of the strategic objectives of transformation, and we needed people that could be reliable and trusted," Mr. Mbabazi, was quoted as saying in the statement.
Mr. Mbabazi also held talks with executives from Sinohydro Group Ltd, which is expected to construct Uganda's 600 megawatt Karuma hydro power plant, at the Murchison Falls, on the River Nile.
Last month, the Ugandan government awarded the construction contract for Karuma to Sinohydro, paving the way for the commencement of the long delayed project. Karuma is partly funded by a Chinese concessional loan.
Dow Jones Newswires