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delegation was controversial in that it came at the same time when the Italian Oil company, Eni announced that it has withdrawn from an earlier agreement it signed with Heritage Oil, to buy its oil fields in Western Uganda.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Meanwhile Eni , the Italian oil company that had earlier showed interest in Uganda oil field has withdrawn its bid after Tullow exercised its right of first option.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.

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leooderaomolo@yahoo.com