Category Archives: Oil

UGANDA sets tough investment conditions for foreign oil companies

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UGANDA HAS SET TOUGH INVESTMENT CONDITIONS TO OIL COMPANIES INTERESTED IN EXPLORATION AND PRODUCTIONS IN THE COUNTRY’S OIL FIELDS.

Mineral and Exploration News By Leo Odera Omolo.

The government of Uganda has set tough conditions for new foreign companies intending to invest in the production of oil and gas in the country.

Briefing members of the Parliamentary Committee on Natural Resources, the Permanent Secretary in the Ministry of Energy, Kabagambe Kaliisa, said one of the conditions set for a company to be approved by the government, it must have a capital base of at least USD 24 billion {Ushs 48 trillion}.

“Since the investment required in the short and long term{2010-2020} is estimated at USD 8 billion, a company with a market capitalization of three time the size of the required investment would be credible”, the PS said.

The PS told the committee meeting in Kampala on Wednesday that the oil and gas operatives are moving into the development and production phases, “Therefore, the type of companies required to carry these activities forward need to have the necessary risk capital and access to project finance for both the short and long term investment.”

“These companies”, he said, “ must have good operator experience, not only in exploration and production of gas and oil, but also in refinery, pipeline development and operations”.

“There was also need for licensing and maintaining several oil companies to avoid monopoly”, Kabagambe said.
In addition, the companies must be agreeable to the government’s current development strategies, which include early commercialization of the resources, value addition, training of Ugandans and paying taxes.

“In order to approve the transactions, the Ugandan government ought to consider the best interest to propel the people in the industry further”, the PS added.

The Permanent Secretary was appearing before the committee to explain the current transactions between the oil companies operating in the country. He also disclosed that 15 oil and gas fields have been explored since the year 2006, with an exceptionally high drilling success of 94 per cent. A reserve of two billion barrels of crude oil worth USD 50 billion has been discovered to be in place.

Kabagambe further explained that the oil reservoirs have to be tested and appraised. He gave the breakdown of the estimated total production costs as follows; “ Power generation and transmission facilities may cost USD 300 million, oil processing and transportation equipment another USD 1.5 billion, refinery development USD 2 billion, further drilling USD 20 million and expanded storage and pipeline infrastructure USD 4 billion.

He said it is therefore beneficial to the country that a bigger player who expresses interest in joining the petroleum industryis given preference.

Kabagambe informed the committee members that Tullow, the Irish firm that has been actively exploring oil and gas in Western Uganda does not have the required capacity and has decided to invite partners. French Total and the Chinese state-owned CNOOC are currently being evaluated to partner with Tullows.

“In recognizing the need to avoid a monopoly, Tullow has presented their plans to partner with both Total and CNOOC”, the PS told the MPs who were attentively listening with a lot of interests.

Kabagambe said, however, that the government has asked Tullow to reconsider its proposal of operating two out of the three exploration areas instead of each partner operating an exploration area. “Tullow has also been asked to submit joint operating and sales agreement with Total and CNOOC”, he added.

The government recently announced that it has approved the deal for Tullow to take over the 50 per cent share of its partner Heritage, in two blocks in the Lake Albert region at USD 1.5 billion. The decision ended a bid by the Italian company Eni to buy Heritage stake.

The PS further disclosed that the transaction between Tullow and Heritage will be subject to a capital gains tax of USD 300 million {Ushs 6 billion} to USD 400 million {Ushs 8 billion}.

The committee members, however, expressed anger over the fact that the oil production sharing agreement had not been made public.

“Our hands are tied. All these issues need to be discussed after when we have read the oil agreement”, MP Beatrice Anywor said.

Another legislator, Aniuta Kawoyo said the government should not delay the production process, adding that billions were being lost as a result.

The state-owned NEWVISION reported that the Ministry of Energy’s principal geologist had declined to comment on the issue as to when the production will commence, but told the MPs that Tullow plans to start selling crude oil in the middle of this year, especially to cement industries.

It was announced during the meeting that a national oil company would soon be established to increase the national participation and accelerate the knowledge and transfer.

Ends
leooderaomolo@yahoo.com

Kenya: Our Laws Not for the Poor, or Not So Rich!

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Our Laws Not for the Poor, or Not So Rich!
By: DR SHEM J. OCHUODHO

Friends,

Yesterday I turned up in court to answer charges with regard to KPC Matters as explained earlier. Below is a media statement I issued after being released on bail. I guess partly because media had enough stuff to fill their spaces, it was not used. I have taken the liberty to share it with ‘on-line media’.

In the course of attending to this matter, two very interesting things court my attention:-

1. Our Justice System Is Only For The Rich – Filthy Reach: if I wasn’t lucky to raise through friends and relatives the KSh 2 million Cash Bail, I wouldn’t have been released. Allow me to promptly thank those who were able to help one way or the other (including some on this list) – as well as those who even though were not able to help materially, considered it (the thought is what counts!), offered prayers and/or moral support. Up to the morning of court appearance, I was contemplating a further failure to appear in court – in the absence of raising the requisite bail amounts. The alternative would have been to be locked up until funds are found. Then I asked myself: how fair are some of our criminal laws? I appreciate that the material funds being talked about (been changing from 2b to 300m and now 800m) are high, but assuming that one is innocent until proven guilty as should be, why should such a hefty bail term be asked for? Especially for someone who has voluntarily traveled into the country/court even without receiving any official court summons? I would have thought the purpose of bail/bond etc was to ensure attendance, rather than ‘punishment’ . I hope these are some of the things our legal-inclined colleagues will be pushing for correcting in the current katiba reforms.

2. But the thing that astonished me the most is the rot in our system, and how deeply corruption has eaten into our social fabric. When I was being transferred to the cells at the high-court awaiting the processing of the bail orders, I was later informed by a friend that he hard to part with ‘something’ small to ensure that I was not handcuffed in the process! Secondly, while in the underground cells, I gathered that yet another good Samaritan friend had to part with KShs 500 for me to be allowed to read newspapers and get ‘VIP treatment’. Fortunately, from the word go I had cautioned the officers that when I was coming to the cells, I ensured that I didn’t carry any single coin with me. At one point, one of their seniors told me: ‘sasa sema, mambo ya new year’. Taking it that I didn’t know what he meant, my response: ‘ni nzuri’. He didn’t look amused, but we/I ignored it. Soon after another came and said: ‘Mheshimiwa, you know I should bundle you inside into the cell-rooms’. I jokingly said: actually am waiting for my ration of ‘mururu ya uji na maragwe (those who have been at one point or other incarcerated for whatever reason know what I mean)’. Hata huko ndani sina shida; hapa tulizoea siku za kale. Utanipeleka room ‘E’ or ‘F’? Akacheka akaachana na mimi. It is true, during University and Bunge times, these were common ‘homes’ given trumped up charges that were a normal feature.

When I later was to share with one of the 4 lawyer friends who offered to help in this matter, one retorted: the matter gets even worse when it is KACC. He went on to narrate that there was a client of his who 2 arresting officers told: ‘give us 300k if you want us to delay your arrest’. Leading me to the question: who is going to save us from graft if citizens have to be saved from bribing even KACC officials? Is this how lowly we have sunk as a people?

Below was my media release:-

——- begin statement —-

MEDIA STATEMENT BY DR SHEM J. OCHUODHO RE KPC MATTERS – 10TH FEBRUARY, 2010

Firstly, I want to thank God for protection. Ever since my wrongful removal from KPC, my life has been at constant danger, in some instances being trailed by strange characters. Given the hitherto unresolved, mysterious deaths of my two former colleagues at KPC – Josephat Amwayi (Procurement Manager) and Walter Otieno (IT Manager) – my concerns cannot be idle talk.

Secondly, while I wonder why it had to take the State 6 years to prosecute me, I am glad at last there is a unique opportunity for this matter to come out fully to the open so that the Kenyan public can decide for themselves whether or not there was any guilt. I took the State to Court for Judicial Review and Wrongful Dismissal 6 years ago. To date, the matter remains unheard. My family, particularly the children have consequently lived with trauma and stigma, wondering what it is their father did to warrant all this. Hopefully, truth and justice will prevail on this matter, as I look forward to a speedy disposition and conclusion.

It is very interesting that the accusations against me have continued to change over time. Initially at the time of suspension, I was accused of ‘not getting approvals’ for the actions we did. When we produced the approvals, the story changed: that we got initial, but not final approvals. When we produced the last and final approvals before actioning, the story has since changed once more to the charge we are now facing: that our lender did not pay the creditors, even when there is documentary evidence to the contrary. Moreover, initially the claim was reportedly for a KShs 2 billion, then KShs 300 million, and now KShs 800 million! Surely, if I had these kinds of money why would I be roaming around the world to eke a living?

I am on record to have said that I was bundled out of KPC for political and business interests; events over time have vindicated me on this, and expect even more serious malpractices to come out to light in the future.

There are people interested to run down KPC and sell it at throw-away prices like they did with Kenya Railways, and others. The rot in the energy sector – not just petroleum sub-sector – shall only worsen as long as the PS remains in office. How come the appropriate bodies have not taken up offers by the outgoing Chair, James Kenane, to shed more light into what ails the sector?

I have been an easy target for the State to use when they want to mislead the world that they are fighting graft. Perhaps not having a god-father and not coming from the right clan, am the easy ‘fall guy’. It happened at the time of our sacking, and even now: there were serious impropriety cases that it had to divert attention from. Even today, numerous such cases abound, and once more I have to be the punching bag. Fortunately, I have a real God for My Father – so I remain unshaken!

Finally, I want to reiterate that as shall emerge during the hearings, the management and business decisions we made were the most prudent under the circumstances. It has to be remembered that as a consequence, we were able to turn around in record time this previously hugely loss-making corporation into a jewel, raking into massive profits during my tenure.

It is my hope and prayer that during this trial, I too would be enlightened on what wrong we did leading to my dismissal and subsequent trial because even with the charges read, I still don’t know.

DR SHEM J. OCHUODHO

—- end of statement —

Thanks to all for the solidarity, and warm rgrds,
Shem

Russians and Chinese firms are in a big scramble for Uganda ‘s oil fields

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RUSSIANS AND CHINESE FIRMS NOW JOIN OTHER MULTINATIONAL COMPANIES IN THE BIG SCRAMBLE FOR OIL EXPLORATIONS IN UGANDA .

Business Features By Leo Odera Omolo In Kisumu City.

President Yoweriu Museveni over the weekend met with the representatives of the Russian-based oil company, Lukoil and encouraged the firm to invest in Uganda’s oil exploration and refining sector.

Andrei Saponzhniko, the Lukoil vice President for Business Development was in Ugandan capital Kampala, and handed his company investment proposal to the Ugandan Head of State, according to a statement from the State House, Entebbe.
This visit by the Russian firm’s delegation was controversial in that it came at the same time when the Italian Oil company, Eni announced that it has withdrawn from an earlier agreement it signed with Heritage Oil, to buy its oil fields in Western Uganda.

“Saponzhniko expressed his company interest in the oil exploration, refinery and training of local manpower to facilitate the development of the sector”, the statement adds.

Lukoil, according to the firm’s website, is Russia’s largest oil company, and the second largest private oil company worldwide by proven hydrocarbon reserves.

The company has about 1.1 per cent global oil reserves, and 2.3 per cent of global oil production. It dominates the Russian energy sector, with 18 per cent of Russian oil production, and 19 per cent of oil refinery.

Most of its exploration and production activity is located in Russia, and its main resources base is in Western Siberia.
However, it is also carrying out projects in Kazakhstan, Egypt, Azerbaijan, Uzbekistan, Saudi Arabia, Colombo, Venezuela, Ivory Coast, Ghana and Iraq.

Its petroleum products are sold in Russia, Eastern and Western Europe and the United States.
Present at the meeting between President Museveni and the Russian’s firm delegation was the Minister for State for Investment, Aston Kajara, and the Chief Executive Officer of the Ugandan Investment Authority, Maggie Kigozi, Ugandan ambassador to Russia, Moses Ebuk and the Russian ambassador to Uganda.

Meanwhile Eni , the Italian oil company that had earlier showed interest in Uganda oil field has withdrawn its bid after Tullow exercised its right of first option.

Two oil fields, block 1 and block 3A in Western Uganda are jointly owned by Heritage and Tulow on a 50-50 per cent joint venture.

Eni spokesperson was quoted by the state owned NEWVISION last Friday as saying “Eni has revoked the sale and purchase agreement for the acquisition of Heritage’s 50 per cent interest in block 1 and block 3A in Uganda for which Tullow has recently exercised its pre-emption right.”

Tullow is selling parts of its own stake to allow for the entry of bigger oil companies that have the capacity and experience to build refinery and pipeline.

The company of Irish origin last week announced it preferred working with state owned CNOOC of China or France’s Total.
At the same time, CNOOC disclosed that it is paying USD 2.5 billion for a stake in Tullow Ugandan oil assets. The purchase was expected to be signed in London last Friday.

“We are still receiving all proposals from the licensed companies {Tullow and Heritage} to sell part of their stake and it is a normal process”, said Ernest Rubondo, the Commissioner in the Petroleum and Exploration department in the Ministry of Energy.

Rubondo, however, did not want to comment on Eni’s withdrawal, but said Heritage was determined to sell its interests, and was convinced they would get a buyer because, “many companies are interested in Uganda’s oil.”
“Once we have scrutinized all the proposals and found the best company with Ugandan interests at heart, we shall inform the public”, he added.

Ends
leooderaomolo@yahoo.com

Uganda’s President Museveni in a series of crucial meetings with foreign oil companies prospecting in Uganda

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PRESIDENT MUSEVENI IN A SERIES OF MEETINGS WITH TULLOW OIL AND OTHER POTENTIAL CHINESE INVESTORS TO THE OIL PRODUCTION IN WESTERN UGANDA.

PRESIDENT Yoweri Kaguta on Monday this week met for the second time with a delegation from Tullow Oil Company, which is a major player in prospecting for oil in Western Uganda.

The Tullow delegation was led by Mr Paul McDade, its Chief Operations Officer, and Mr.Elly Karuhanga, the president of Tullow Oil in Uganda. The meeting took place at the State House Entebbe.

The government owned NEWVISION newspaper reported this morning, quoting a statement from State House, which says among other things that Tullow Oil delegation was later joined at the meeting by another delegation from the Chinese state-owned oil company CNOOC, which has expressed interest in joining Uganda oil and gas sector by partnering with Tullow.

Museveni, according to the communiqué issued by State House after the meeting, had told the two sets of delegations that the government would discuss all the proposals by the interested companies operating in the oil and gas sector, adding that Uganda looks forward to welcoming new companies.

“The government will reach a decision in the coming weeks on the current process of pre-emption that will respect the contractual rights of the existing companies”, the State House statement said in part.

In a separate statement issued to the press, Mr McDade expressed satisfaction with the government’s position. “It means more investors in Uganda can continue to have confidence in the sanctity of contracts”.

McDade said his company has welcomed the openness the President had shown to the new entrants in the oil industry, such as the CNOOC, “who will require to work with Tullow as we enter the next phase of the development of oil industry in the country” added Mr. MCDade.

The Monday meeting was the second time in three days the President has met officials of Tullow. On Friday last week, Museveni met Tullow Chief Executive Officer {CEO}, Mr Aidan Heavyon on a series of discussions.

These are clear indications of the business seriousness with which the Ugandan government has attached to the emerging oil industry in the country.

Ends
leooderaomolo@yahoo.com

TOO MUCH TWISTS AND TURNS IN UGANDAN OIL FIELDS OWNERSHIP AS TULLOW OIL EXCERCISES ITS PRE-EMPTIVE RIGHTS AGAINST ITALIAN ENI

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TOO MUCH TWIST OF EVENTS REGARDING FREQUENT CHANGES OF THE TEAM OF INVESTORS IN  THE UGANDA OIL AND GAS FIELDS AS FRESH CLAIMS EMERGE THAT TULLOW IS TO BUY OUT HERITAGE.

Business Feature by Leo Odera Omolo In Kisumu City.

There seems to be too much excitement over the newly discovered oil and gas fields in Uganda. The discoveries appear to have attracted many national and international firms, as evidenced  by the frequency of announcements of ownership changes almost on a monthly basis.

Tullow oil, the London-based firm, exploring for oil and gas fields in Uganda, has once again offered to buy out its major partner, Heritage Oil.

Two fields, Block 1 and 3A in Western Uganda, are jointly owned by Heritage and Tullow in a 50-50 per cent joint venture.

Under the  existing agreement,  signed between the two, Tullow has the first option to buy, in case Heritage wants to sell – what is called pre-emptive rights.

But in a surprise move, Heritage in December last year entered into a deal to sell its stake to an Italian oil giant company, Eni, for USD 1.5 billion.

According to the deal, Eni would pay USD 1.35 billion in cash, and a further deferred consideration of USD 150 million in cash or take in a producing oilfield of a similar value within two years, subject to approval by the Uganda government.

The deadline set for Tullow to exercise its pre-emptive rights expired last Sunday 17th January 2010.

In a statement issued simultaneously in both London and Kampala, the company announced that it secured the money to match Eni’s offer, and will enter into a sale and purchase agreement with Heritage for the proposed oil fields.

“A syndicate of Tullow’s core relationship banks has provided the banking facilities required by Heritage shareholders at a meeting scheduled for January 25, 2010 and consent from the Ugandan government”, said the company.

The completion of the agreement is subject to certain conditions, including approval by the Heritage shareholders at a meeting scheduled on January  25th.

Tullow, which is in the process of identifying a partner for another oil field in Block 2, where it has a 100 per cent stake, said the interested companies approved the deal .

“The parallel exercising its pre-emption rights,Tullow has been running a transparent farm out process which has attracted a significant  number of companies..”

“The process is now well advanced and identified oil companies,  are supportive of the group decision to pre-empt..”, continued the company statement.

The company statement does not name the identified oil companies, but sources in Kampala said they include French’s Total, American giant Exxon Mobil and the state owned China National Oil Company.

“Tullow is committed to retaining a material stake in Uganda and continue to invest for the long term”, the company’s CEO, Mr Aidan Heavy is quoted in both London and Kampala as having said this.

“As we entered the development phase, we are working closely with the Ugandan government to introduce a mutually maintained partner, with downstream expertise, who is aligned with this long term approach”.

“Buying out Heritage and taking on board a bigger partner will enable the company to take care of the whole production chain, including the pipeline and refinery, “said Mr Heavy.

But informed sources within the business circles in the oil sector in Kampala, says reaching the final deal could take time, should the Italian oil giant offer a higher price, an option that is largely available to them.

Over the last six years, Tullow and Heritage have invested over USD 700 million in the Lake Albert Rift Basin, in Western Uganda.
“They drilled 27 wells to prove over 800 million barrels of oil, and identified the existence of over 1.5 billion barrels of potential yet to be explored”, the statement said.

Tullow offer came just days after the Italian Foreign Minister, Francis Frattini visited Uganda, and told President Yoweri Museveni that Eni is ready to invest billions of dollars in the Ugandan oil industry.

It also came at a time when visiting Libyan Trade delegation has expressed interest in  the building of an oil refinery in Uganda.
Libyan government owns 2 per cent stake in Eni, and has announced that it planned to make it the second biggest shareholder after the Italian government.

Energy experts reckon that refining the oil locally would be much cheaper that exporting it  as crude, considering the waxy  nature of Ugandan oil.

Obviously, the Uganda business and government circles are viewing these twists of events, coming so rapidly, as spelling dooms and bad omen, considering the confusion and curse that the oil commodity has visited on several countries of the world, where it existed as the major source of earnings.

Ends

Uganda to built its own oil refinery as a British firm is contracted to conduct feasibility studies

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A BRITISH FIRM WINS A LUCRATIVE CONTRACT TO CONDUCT THE FEASIBILITY STUDY ON THE CONSTRUCTION AND DEVELOPMENT OF AN OIL REFINERY IN UGANDA.

Business News By Leo Odera Omolo In Kisumu City

A British engineering firm based in the United Kingdom, Foster Wheeler Energy Ltd, has secured a contract to carry out a feasibility study for the construction and development of an oil refinery in Uganda.

The refinery development programme will go through five stages; feasibility study, project promotion and attraction of developers, and the front-end engineering design, engineering procurement and construction and commission and operation of the refinery.

The programme and details of the project were disclosed by the Permanent Secretary in the Ministry of Energy, Kabagambe Kaliisa at the weekend that the refinery feasibility study, which is expected to last for six months, will commence on January 2nd and be completed in mid 2010.

“The objective of the feasibility studies are to recommend the size, configuration, location, cost and financing option of the refinery and the attendant infrastructure, and market for the refined product’s preliminary environmental assessment of the possible impact of refinery development,” Mr. Kaliisa said.

The study will also recommend possible areas for private sector participation.

 Mr.Kaliisa further stated that Foster Wheeler Energy Ltd was selected in accordance with the international procurement process, which started in August 2009.

“The process had attracted 35 companies worldwide, which expressed interest in undertaking the study.”

Out of these bidders, six were contracted to submit their proposals and that Foster Wheeler Energy Ltd, was considered the best of all.
Foster Wheeler is a global engineering and construction contractor with a reputation for delivering high quality, technically advanced, reliable facilities and equipment on time.

Ugandan government had expressed its wish to have its oil and gas refined locally as opposed to other interested groups, which had suggested that the oil be exported in the crude form. Suggestion to use the refinery facilities in Mombasa were shot down by President Museveni who insisted that the logistics of using the Mombasa based refinery would be too exorbitant, and insisted that the development of the local refinery was the better option.

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leooderaomolo@yahoo.com

Eni Finally Buys Uganda oil fields, and brings to an end weeks of business speculation on the deal

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ELNI FINALLY BUYS UGANDA OIL FIELDS AT A PRICE OF USD 1.5 BILLION, ENDING SPECULATIONS ABOUT THE DEAL.

Business Report By Leo OderaOmolo In Kisumu City’

HERITAGE Oil, the multinational oil firm exploring oil and gas in Uganda has finally entered into a sale-purchase agreement with Eni Spa, an Italian energy giant, for the sale of its 50 per cent interest in Block 1 and 3A oil fields in Albertine region.

The consideration comprises USD 1.35 billion in cash, and a further contingent, deferred cash  consideration of either USDS 150 million, or an interest in a mutually agreed producing field, independently valued at a similar amount, Heritage announced yesterday.

In an article sourced in London and published in its to-day edition, the government owned NEWVISION quoted at length Mr. Tony Buckingham, the firm’s CEO, as saying that the transaction would create  a significant shareholder value at a critical juncture in Ugandan asset’s life circle.

“We are delighted to enter into this binding agreement with Eni, whom we believe is well positioned to further our work in Uganda, and realize production at the earliest possible time frame”.

In the context of the proposed transaction, the Heritage board believes that there is a provision in the joint operating agreement with Tullow that could give rise  to a right of pre-emption in favor of Tullow.

Heritage, according to the report, will notify Tullow of the proposed transaction, which has the right to acquire the disposed assets on the same terms and condition as agreed with Eni without reservation.

It says, Tullow secured additional financing, bringing its total debt totality to USD 2 billion, although analysts point out that it would need more funds to exercise the option and maintain spending on other key projects.

In 1997, the Heritage group become the first licensed oil and gas company in almost 60 years, for actively prospering in Uganda, after they were awarded a license covering the original Block-3 in the Lake Albert Basin in Western Uganda.

In 2001, the firm sold 50 per cent of their license to Energy Africa, which were subsequently acquired by Tullow.

Thirty seven holes will have been drilled in the Albert Basin since the beginning of the 2006, 26 of which were with oil deposits, three of them testing over 1200 barrels of oil per day.

The Ugandan government has repeatedly stated in the recent past that it wanted to achieve early production as a stepping stone to growth and important national economic output.

This now brings to an end the weeks of speculations and rumors, including the alleged Libya’s interference in the oil drilling in Uganda.

Ends

Col Muamor El-Gadhafi may have secretly bought Ugandan Oil fields through a Colonial compensation treaty with Italy.

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UGANDAN GOVERNMENT HAS DENIED THAT LIBYAN STRONGMAN COL MUAMOR GADHAFI IS AFTER ITS OIL FIELDS, AS REPORTED BY ITALIAN PRESS.

Writes Leo Odera Omolo In Kisumu CITY

UGANDAN government has strongly refuted and rejected suggestions that Libyan strongman Col Muamor El-Gadhafi is secretly eying Uganda’s oil fields.

“The government of Uganda does not accept the view that Gadhafi is after Uganda’s oil”, said a statement issued by the Minister or State for Foreign Affairs, Sam Kutesa.

“In any case, Libya has more oil than Uganda will ever find. We therefore do not think that Libya is targeting Uganda’s oil”, the statement went on.

Minister Kutesa was reacting to a SUNDAY VISION leading article entitled, “Is Gadhafi after Uganda’s oil?”

“Any misunderstanding the article may have caused between the two countries is unfortunate and we disassociate ourselves from it,” the Minister’s statement further explained.

Citing the Italian media reports, the SUNDAY VISION article said Libya on three occasions had announced its interests to buy up to 10 per cent shares in Elni, the Italian company that wants to take over Heritage’s stakes in Uganda’s oil fields. That would make Libya the second biggest shareholder in the company, after the Italian state giant oil firm, which has 30 per cent stake.

Libya state owned company, Tamoil  had earlier won contract to built Kampala oil terminal and the extension of the Eldoret-Kampala oil pipeline.

Earlier reports had indicated that Libyan Gadhafi planed to buy up to 10 per cent shares in Elni, the Italian oil giant company that, on Friday last week, signed a deal with the UK based Heritage, to take over the oil field in Uganda.

That would make Libya the second biggest shareholders of the company after the Italian biggest oil firm, signed sale and purchase agreement to sell its interests to Elni for usd.1.5 billion, formalizing a preliminary agreement made on November 23.

Gadhafi, the report continued, first mentioned it in August 2008, after the signing of a “friendship treaty”, under which Italy would pay compensation for its misdeeds, during its colonial rule of Libya.

“It {the treaty} allows for something that, in different times, would have been absolutely impossible, such as a foreign state that enters with a take of 5 to 10 per cent in your national oil company, which is what we would want to do”, Gadhafi was quoted in the Italian newspaper La Republica as having said this.

Gadhafi’s interest in  Elni was confirmed in December last year by the Libyan ambassador to Italy, Hafed Gaddur.

“Libya would be interested in buying up to 10 per cent of Italian oil giant Elni as one of a number of investments it is considering in Italy”, he told the newspaper.

Describing the investment in Elni as financial, Gadhafi said Libya would look to getting a seat on the board of the company.

And in May, Libyan Energy Minister, Shokri Ghamen, reiterated his country’s interest in acquiring up to 10 per cent of Elni, as well as a stake in Italy’s electricity company, Enel, the world’s largest energy provider.

Ends
leooderaomolo@yahoo.com