UPDATE: Uganda President Meets Tullow Executives As Deal Nears Approval

The Ugandan president held talks with the chief executive of U.K.-based Tullow Oil PLC (TLW.LN), Aidan Heavey, Thursday to discuss final details of the company's planned sale of two thirds of its stakes in the country's main oil resource to France's Total SA (TOT) and China's Cnooc Ltd. (CEO), officials said Thursday.

President Yoweri Museveni held closed door talks with Heavey at the statehouse in Entebbe over Tullow's long-delayed $2.9 billion sale of its assets in Uganda's Lake Albertine rift basin, according to a government official with direct knowledge of the situation.

"The president still has some slight concerns with the stabilization clauses of the joint venture oil production agreement," said the official, who did not want to be named. "But these should be one of the last meetings."

A Tullow spokesman, George Cazenove, confirmed the meeting.

"Mr. Heavey is in Uganda to meet staff as part of a end-of-year trip to various Tullow operations in Africa. He paid a courtesy call on President Museveni this morning," he said in an emailed statement.

According to Ugandan officials, Total executives led by the chief counsel, Mary Begg-Safar are also scheduled to meet the president this week. Total could not comment immediately.

The talks underscore the determination of both government and company officials to conclude the long-delayed deal, which is expected to unlock at least $10 billion worth of investments in the country's oil sector.

Last week, the Ugandan leader rejected parliament's resolutions to delay the deal, saying that the move is likely to undermine the credibility of the government and hurt future investments in the country's nascent oil and gas sector.

According to Angelo Izama, an analyst with a Ugandan-based research group, Fanaka Kwawote, the Ugandan government is keen to conclude the deal and collect taxes on the transactions in order to strengthen the local currency.

"It is in government's interest to conclude this deal before the end of the year," he said.

The Ugandan local currency has depreciated by at least 15% since the start of the year, a move detrimental to the country's inflation rate.

During a parliamentary debate Oct. 11, lawmakers across the political divide voted to ask the government to withhold consent for Tullow's planned sale to Cnooc and Total, until all necessary legislation is put in place to regulate the sector.

Tullow, which had hoped to complete the transaction in September, said last week that it expected government approval shortly.

-By Nicholas Bariyo, Dow Jones Newswires; 256-75-2624615; [e-mail]