Tullow Oil expects Ugandan authorities to approve a shareholding agreement to develop a landmark $10 billion oil project in the east African country, a senior executive at the London-based explorer said.
"We expect an approval within weeks, not months," Tullow Vice President Tim O'Hanlon told reporters on the sidelines of an oil conference, denying that disagreements between Tullow and Ugandan authorities were behind delays in Kampala's decision.
Tullow is in the process of acquiring Heritage Oil's 50 percent equity in two jointly owned Ugandan exploration blocks -- 1 and 3A -- and has applied to the Ugandan government to sell stakes on to the China National Offshore Oil Corporation (CNOOC) and France's Total.
"It's an enormous decision for Uganda. We don't begrudge their right to examine the issues," O'Hanlon said. "They are delighted with the partners we brought and they have no problem with the Heritage right to sell its assets."
"They don't want to make any errors. They are no substantial issues (in our discussions)," he added.
Tullow asserted its pre-emption rights after Heritage Oil moved to sell its 50-percent stake in Ugandan exploration areas 1 and 3A to Italy's Eni SpA in November last year. Eni withdrew and revoked its $1.5 billion purchase agreement with Heritage on Feb. 5.
Tullow then applied to the government to sell stakes on to CNOOC and Total, saying it lacked the technical skill and resources to develop the complex project alone.
"We went to the government with our hands up saying this (project) was too big for Tullow. This is a more than $10 billion investment and the government quite rightly wants a refinery in the country," O'Hanlon said.
"We wanted to share this risk. So now we have a more elegant solution, with one third (for Tullow), one third (for CNOOC), one third (for Total)," he added.
But two letters seen by Reuters in recent weeks showed that some issues may be behind an approval that Tullow and Heritage have been expecting "within weeks" since February.
In a March 23 letter to Uganda's Energy Minister Hilary Onek, Heritage asked the Ugandan government to explain why there was a delay in approving the sale.
And in a separate letter, Uganda's state-run environment authority has accused Tullow of taking inadequate steps to safeguard the environment around their drilling sites.
Uganda discovered oil in 2006 in the Lake Albert region along the border with the Democratic Republic of Congo and exploration companies estimate reserves at 2 billion barrels.
O'Hanlon said Tullow and its partners expected to start production next year, adding a refinery was due to come on stream by 2013 or 2014, although the output capacity of that refinery was yet to be determined.
Tullow, CNOOC and Total are likely to start exporting more than 200,000 barrels per day of Ugandan crude oil from 2015, O'Hanlon said.