The Uganda National Oil Company (UNOC) has signed a memorandum of understanding (MOU) with China National Offshore Oil Company (CNOOC) to jointly carry out oil exploration in a new block in the country.

The deal was signed in Beijing alongside the ongoing China-Africa forum on cooperation, in the presence of Uganda’s President Yoweri Museveni.

The MoU was signed by UNOC CEO Dr Josephine Wapakhabulo and CNOOC international chairman Fang in Beijing.

A statement issued by President Museveni office as said: “The exploration aims to increase the amount of crude oil produced in Uganda to support the operations of the refinery, as well as the oil pipeline.”

“The exploration aims to increase the amount of crude oil produced in Uganda to support the operations of the refinery as well as the oil pipeline.”

Under the agreement, both companies will collectively work on joint exploration and development of oil blocks in Uganda’s oil belt in the Albertine graben.

Uganda is planning to start crude production in 2021 from the Albertine rift basin bordering Democratic Republic of Congo. Reserves in the basin are claimed to be around 6.5 billion barrels.

The Chinese oil company has already operations in Uganda where it jointly owns fields with French oil company Total and London-based Tullow Oil.

Uganda is looking to export crude using a pipeline to neighbouring Tanzania. Additionally, it is planning to domestically process a portion of the crude production at a refinery, which will be set up near the oilfields.

More commercial agreements are expected to be reached between the companies. The parties expect to secure all relevant approvals by end of this year so that they can commence exploration next year.