Work on a pipeline that would transport crude oil 1,445 km (898 miles) from Uganda to Tanzania’s coast has been suspended.
Tullow Oil had planned to sell a stake in the $3.5bn (£2.8bn) project to state-owned Chinese firm CNOOC and French oil giant Total, but the deal collapsed last week after the companies failed to secure an agreement on tax relief from Uganda’s Revenue Authority.
Tullow Oil, an Irish company, discovered proven reserves of more than a billion barrels of oil around Lake Albert in 2006, but the resources have yet to be exploited.
An industry official told Reuters news agency that the collapse of the deal last week had “meant uncertainty in terms of who will meet what cost in developing the project, which is meant to have a similar shareholding structure like that of the oilfields”.
