Uganda has repossessed an oilfield that belonged to Tullow Oil after the period allotted to appraise the site expired.
The UK exploration company said the field was not commercially viable.
“Time provided to complete the appraisal work on this field expired and no further extension for appraisal was given by Government,” said a statement posted on the Petroleum Exploration and Production Department website.
Uganda hopes to start crude production in 2017 from the Albertine rift basin.
The basin is located along the border with the Democratic Republic of Congo.
Tullow is one of the three exploration companies in the country, and is still awaiting government approval for eight production applications it submitted last year.
CNOOC is currently the only company with a government approved production license.