State Minister for Investment Aston Kajara told AFP that senior Tullow executives met President Yoweri Museveni in his office on Monday to discuss the fate of the east African country's much-coveted oil fields.

"Tullow presented a proposal to his excellency the president which revealed they had a number of partners interested in developing oil in Uganda," he said.

Kajara listed China's state oil giant CNOOC, France's Total and US company Exxon Mobil as partners it could bring in to develop the oil fields, if it was allowed to buy the assets of its Canadian partner Heritage Oil.

Tullow and Heritage control much of Uganda's confirmed oil reserves in a 50-50 partnership. Tullow by itself also owns a separate oil field zone.

When Heritage announced its desire to sell its share, Tullow invoked a previously negotiated pre-emptive right to buy out the Canadian company and made a bid of 1.35 billion dollars.

Tullow's move to swallow up Heritage's assets had sparked Ugandan fears that the British group would secure a virtual monopoly over the country's oil fields and drew a pledge by Kampala to support a rival bid by Italian group ENI.

"We haven't vetoed yet, but our statement is very clear that we shall not allow a process that will promote monopoly and therefore we support the Heritage-ENI transaction," Energy Minister Hillary Onek had said last week.

ENI chief Paolo Scaroni even told Italy's La Repubblica daily on Monday that his group was planning to invest 13 billion dollars (9.2 billion euros) to develop hydrocarbons in Uganda after acquiring Heritage's rights.

But Information Minister Kabakumba Matsiko told AFP Tuesday that Uganda had not made a final decision to block Tullow's bid.

"The final decision is a process and government has not yet reached a final decision," he said.

Kajara suggested that Museveni and the Tullow executives ironed out their differences during Monday's meeting at State House.

"They said they wanted to remain working in this country and wanted to involve other partners who have experience in developing, refining and pipelines," he said.

"The president listened to them and he advised that Onek should retract that letter," he said, referring to a letter the energy minister sent to Tullow to inform them that the government objections were final.

The latest estimates suggest that Uganda's northwestern Lake Albert region holds two billion barrels of oil.

Expectations for Uganda's embryonic oil sector are for a refinery with a capacity of 150,000 barrels per day, with production predicted to ramp up to that level between 2014 and 2016.

The prospect of seeing a British firm secure a stranglehold on the industry has sparked concerns among some commentators and officials that their country was being "re-colonised".

"Some of these oil companies are behaving as if they own the oil. They don't. These are resources that belong to the people of Uganda," Onek said last week, echoing those concerns.

But several Ugandan analysts have said that Museveni is anxious to reap some benefit from Uganda's oil reserves before the upcoming general elections, scheduled for early next year.

They argue the president would be drawn by a bid that offers Uganda significant cash upfront, before any oil is pumped.

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