Russia's LUKOIL eyes Uganda's oil industry

Russia's LUKOIL LKOH.MM plans to invest in Uganda's nascent petroleum industry as foreign interest in the country's newly found oil continues to mount, a statement from the Ugandan president's office said Monday.

The east African economy is under a growing spotlight by petroleum investors as leading industry players scramble for oil reserves discovered in the west of the country. A delegation from the company led by Vice President for Business Development, Andrei Sapozhnikov, met Uganda's President Yoweri Museveni on Friday to discuss their plans, the statement said.

"Sapozhnikov expressed interest in the oil exploration, refinery and the training of local manpower to facilitate the development of the sector," the statement said without giving any indication of how much LUKOIL was looking to invest.

It said Museveni was "pleased to receive the investment proposal of the company and informed his guests of the variety of opportunities in the petroleum sector in Uganda". LUKOIL is the latest petroleum company to seek entry into Uganda following China's CNOOC 0883.HK and France's Total TOPF.PA among others.

Italy's Eni SpA ENI.MI pulled out of its planned $1.5 billion purchase of Heritage Oil Plc's HOIL.L Ugandan assets last week. Tullow Oil TLW.L and Heritage control three oil blocks that cover the Ugandan side of Lake Albert, but the explorers lack the technical skill and resources to develop the complex project alone.

Explorers discovered crude deposits in 2006 that they say could amount to billions of barrels of oil in the Albertine Graben, on Uganda's western border with the Democratic Republic of Congo. Production is expected to start later this year.