Kampala — The government of Uganda has sighed a memorandum of understanding with oil companies to support sustainable Development of the Discovered Petroleum Resources in the Albertine Graben.
The MOU, which was signed by energy minister, Irene Muloni and the four licensed oil companies operating in the country, is aimed at providing a framework for harmonising the commercialization plan for the development of the discovered oil and gas resources in western Uganda.
"This MOU will help Government in planning for the use of the petroleum for power generation, supply of crude oil to the refinery to be developed in Uganda by Government and export of crude oil through an export pipeline or any other viable options to be developed by the oil companies," she told a news conference last week.
CNOOC Uganda Limited, Total E& P Uganda B., Tullow Uganda Operation Pty Limited and Tullow Uganda Limited are required to support the government in developing the new refinery including public endorsement of the project.
The oil companies had preferred a pipeline to the coast.
However in return, the government now has to provide support to the oil companies in acquiring approvals for studies and surveys for an export pipeline and initiate discussion talks with neighbouring countries in relation to the cross-border frame- work for the pipeline
Muloni said the signing of the MOU is a vital step towards the commercial production of Uganda's discovered oil and gas resources.
Production is expected to start within four years, after a production licence was issued to China's CNOOC late last year.