Total announced Wednesday the acquisition of a one-third interest in Blocks 1, 2 and 3A in Uganda held by a subsidiary of Tullow Oil plc, for $1,467M. Located in the Lake Albert region, these three licenses cover a total area of close to 10,000 square kilometres. Exploration and appraisal work has already discovered oil resources of over one billion barrels and Total estimates that the area’s remaining exploration potential is roughly similar.
Following this acquisition, Total becomes an equal partner with Tullow and CNOOC in the blocks, each with a one-third interest and each being operator of one of the blocks. Subject to the decision of the Authorities, Total will be the operator of Block 1.
“It is a strategic move in line with our aim to be bolder in Exploration & Production”, said Yves-Louis Darricarrère, President, Total Exploration & Production. “ With this acquisition, we have entered a new oil province, giving us access to substantial proven resources and high-potential acreage. The size of the discoveries indicates that large-scale development may be possible. Plateau production could exceed 300,000 barrels per day, depending on the results of the future drilling program.”
The development plan being considered consists of installing production facilities around a principal production center in the northern area of the basin and a secondary one in the southern area. The project also includes an export pipeline to carry the oil to the Indian Ocean to access international markets. In addition, the partners will, with the Ugandan government, study and promote the construction of a domestic refinery that will allow the country to benefit directly from refined products.
“We are building on our long experience in Africa and our strong presence in East Africa. Total has been in Uganda since 1966, through its marketing operations where we hold 20% market share,” said Christophe de Margerie, Chairman and Chief Executive Officer of Total. “This new partnership is in line with Total’s strategy as an integrated oil company. We are delighted with our partnership with Tullow and CNOOC and are confident that together we will be able to successfully meet the project’s many challenges, respecting and benefiting both Uganda’s and all other stakeholders’ interests.”