Kampala — TULLOW Oil wants to sell 50% of its stake in the Ugandan oil fields in order to realise optimum production. The Irish-based firm, which is exploring for oil and gas, has three licences on the Ugandan side of the Lake Albert Rift Basin, which can deliver up to one billion barrels of oil.

The discovered oil and gas in the Albertine Graben is about 600 million barrels of oil, an amount considered viable for commercial oil production.

Over 22 oil wells have been confirmed to contain world-class reservoir quality and productivity. The Irish Times quoted Aidan Heavey, the Tullow chief executive officer, as saying: "What we are looking at is bringing in a partner to fund the pipeline."

Heavey said the first phase would produce around 20,000 barrels of oil per day (bpd), while the next phase would be more expensive and time-consuming since it would require a pipeline.

He said exploration companies rarely take 100% of any licence or interest and usually bring in partners. For Uganda, Tullow decided to keep full ownership in order to move quickly through the exploration phase.

Simon D'Ujanga, the energy state minister, said in an interview on Monday:"We have been having numerous discussions with Tullow. When they bring their proposal, we shall consider it and make a decision."

The announcement follows a disagreement between the Government and the oil firm, which was threatening to postpone the project indefinitely. The Government wants the oil to be refined locally to satisfy the country's energy demands and boost the economy. However, Tullow had insisted the oil should be exported to Mombasa for regional and international markets. Also, the Government wants production to start with about 100,000 bpd.

Heavey said Tullow was likely to begin finding a suitable partner next year when production is about to start.

By 31 March, 2009, Tullow had a net debt of £276m (sh993.6b). However, it can borrow up to $2b (sh4,400b) to replace the existing debts and provide future capital commitments, enabling it to continue pursuing its investments plans and long-term strategy.

In January, the group completed a successful share issue and raised £402m (sh1,447.2b).