UPDATE 1-Uganda blocks Ophir from taking over Dominion assets

Thu Dec 13, 2012 8:22pm IST

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* East Africa a key market for Ophir Energy

* Govt demands taxes before assets transfer

KAMPALA Dec 13 (Reuters) - Uganda has blocked British explorer Ophir from taking over Dominion Petroleum's assets in the east African nation despite its acquisition of Dominion, a senior official said on Thursday.

East Africa is Ophir's main exploration focus area, with its biggest assets in Tanzania where it is looking for oil and gas.

"We're aware Dominion Petroleum Uganda's parent company was acquired by Ophir but we were never notified and neither did we clear the transaction," Honey Malinga, acting commissioner for the Petroleum Exploration and Production Department, told Reuters.

He said Dominion did not follow the specified procedure for transfer of assets in the energy sector.

"Dominion would need to tell us how much they're selling, then we would have to clear them, taxes on their earnings would have to be paid. All that has not been done," Malinga said.

Ophir did not respond immediately to a Reuters' request for comment.

Malinga said Dominion, which agreed to Ophir's takeover in October last year in a $186 million deal, owns one exploration block licence in the country where British company Tullow Oil discovered commercial deposits in 2006.

The government is engaged in an arbitration process with Heritage Oil after the Britain-based oil firm disputed a $404 million tax bill from the sale of its assets to Tullow Oil in 2010 for $1.45 billion.

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