French oil major Total E&P Uganda has suspended all activities, including tenders on the East Africa Crude Pipeline (EACOP), sending shivers among the participants in the Uganda oil industry.
The suspension follows the collapse of the Tullow sale deal where Total and China National Offshore Oil Company (CNOOC) had agreed to buy the former’s interests.
Total executives have met President Museveni several times in a bid to pace up the industry decisions.
The suspension, which comes days after the layoff of some staff, is significant for the country’s oil industry.
Industry insiders said it could send the whole industry into disarray and/or collapse the industry.
Cnooc also laid off some staff in Uganda last week after the collapse of the Tullow Oil deal.
The collapse of the Tullow deal rubbed the companies the wrong way. The government disagreed with the companies on the issue of tax and recoverable costs.
The companies have not said officially why they are doing these things. Knowledge people say the companies are showing their dissatisfaction with the government’s indecisiveness.
They had employed people but because of the deadlock in the industry, many remained redundant.
Government failed to reach the Final Investment Decision (FID) that would have unlocked the money and made the pipeline and refinery projects kick-off.
With the collapse of the Tullow deal, it is expected that it will even take longer to get the FID signed.
The country expects the actual production of oil in 2023