Photo: Tullow Oil

President John Atta Mills turns on Ghana's first oil flow.

Kampala — The proposed sale of multimillion dollar stakes by British-based explorer Tullow Oil to France's Total and China's CNOOC has been delayed by disagreements over tax compensations, President Museveni has said.

Mr Museveni told reporters at a news conference in Kampala yesterday that the companies involved in the deal had requested to include a stabilisation clause to shield them from possible loses in case Uganda increased its tax policy but the failure to agree on what sort of formula to calculate any compensation now stands in the way of the $2.9 billion (Shs7.3 trillion) deal.

Tullow Oil had initially indicated that it was on track to complete the long-blocked sale of stakes by the end of January but Mr Museveni's comments, reflective of comments he recently told ruling party MPs, tell of uncertainty as to just when the deal will finally be completed.

"I was ready to authorise but some of the oil groups brought new confusion so I did not accept," said Mr Museveni when asked to offer any indication as to when Uganda will finally endorse Tullow's quest to sell part of its shares in what is known as a farm down.

He said government had found no objection to the oil company's insistence on including a protective clause to "stabilise the income of the oil company" but only if "we have got a formula of calculating that loss."

Mr Museveni said Uganda had suggested "scientific" methods of calculating the loss, Net Present Value (NPV) and Internal Rate of Return (IRR), but the oil companies "didn't like that."

The NRM leader also said there were disagreements over plans by the government to build an oil refinery in Uganda to process petroleum or build a pipeline to export crude oil.

"Now one of the oil companies, [from] France [Total], said, no you must agree now. We said no, we cannot agree without a kibalo [a calculation of the crude oil for processing or export]," he said. "I don't know whether they have changed their minds, but I have not heard from them recently."

At an earlier press briefing, Equatorial Guinea's visiting leader Theodore Obiang Nguema offered counsel on how best Uganda can manage its nascent oil industry and recommended the establishment of a national body that will oversee petroleum exploration and resource management. "This will be the basis for you to actually have full control over this business," said Mr Nguema.

Mr Museveni said Uganda would "definitely" cooperate with oil producer Equatorial Guinea in the oil sector, as well as "the question of strengthening Africa, guarding the freedom of African countries."

Mr Nguema, current chair of the African Union admitted that the fall of governments in Ivory Coast and Libya last year at the behest of western powers, had left him "highly disillusioned" with the discovery that "Africa is not respected, is not given the recognition it is supposed to be given."