uganda tax resolved, page-8

this from Reuters today:
UPDATE 1-
Tullow says Uganda plan to hinge on Heritage deal
Tom Bergin, 9:53, Wednesday 10 November 2010
* No drilling at Uganda blocks

* Tullow seeks to decouple disputes, govt wary

* Jubilee on track for December startup

* Shares rise 0.4 pct

(Adds details from interview and shares)

LONDON, Nov 10 (Reuters) - Explorer Tullow Oil said a dispute with the government of Uganda had forced it to abandon drilling at two oil-rich blocks near Lake Albert and that it was unsure when this would recommence.

The London-based company added that the government was wary of agreeing to a plan to decouple Tullow's dispute from another, potentially lengthier, dispute between the government and Tullow's former partner, Heritage Oil (Frankfurt: A0NG6K - news) , which could delay a return to drilling.

"We have no definitive timeline (for a resolution)," Chief Operating Officer Paul McDade told Reuters in a telephone interview.

Tullow bought half-shares of two oil blocks from Heritage earlier this year, giving it 100 percent ownership of three blocks which cover the Ugandan side of Lake Albert and which Tullow believes could contain billions of barrels of oil.

Heritage refused to pay capital gains tax on the sale, which the government and Tullow said was due, and subsequently the government refused to renew the licences for Tullow which had planned to sell stakes to France's Total and China's CNOOC (0883.HK - news) .

The licence dispute has forced Tullow to halt operations at the blocks.

"Operationally and in block 1 and 3A, we're not able to go up there and operate at the moment so those licences are on hold," McDade said.

"We're not initiating new drilling in those blocks."

Tullow hopes to decouple the two disputes, allowing it to reach an agreement in the near term, but it said in a statement on Wednesday that the government wanted to achieve some resolution of the tax dispute first.

McDade said the government was concerned that if it renewed Tullow's licence and approved the sale to CNOOC and Total, without a deal on the tax issue, that this could prejudice its position in arbitration with Heritage over the tax bill, which is worth hundreds of millions of dollars.

The London-based company said its Jubilee field in Ghana was on track to begin production in December and that full year oil and gas production would average 58,000 barrels of oil equivalent per day.

Tullow shares were up 0.41 percent at 1,236 pence 0951 GMT, against a 0.69 percent rise in the STOXX Europe 600 Oil and Gas index . (Reporting by Tom Bergin; Editing by Hans Peters)