Total optimistic over Uganda's oil industry

 President Yoweri Museveni meeting Patrick Pouyanné in 2015. File Photo

Total's chairman Patrick Pouyanné has expressed satisfaction of the company's move of taking up more interests in Uganda's oil and gas industry.

Total and Tullow have entered into an agreement under which Total will acquire an additional 21.57% interest from Tullow in the Uganda Lake Albert oil project.

Pouyanné who is also the company's chief executive officer in a statement from Paris yesterday said: "Our increased share in the Lake Albert project will bring significant value to Total and fits with our strategy of acquiring resources."

He explained that following this transaction, Total will hold a 54.9% interest, strengthening its position in this competitive project and paving the way for a project sanction in the near future.

The overall consideration paid by Total to Tullow will be $900m (sh3.2 trillion), representing a reimbursement of a portion of past costs, payable in instalments along the development of the project, with an initial payment of $100m (sh727b) at closing.

"Following the agreement on the Tanzanian export pipeline route, this transaction gives Total a leadership position to move this project efficiently toward final investment decision in the current attractive cost environment, while providing strong alignment and a pragmatic financing scheme for our partner Tullow," Pouyanné said.

Under the terms of the deal, Total will acquire 21.57% out of Tullow's existing 33.33% stake in all of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A.

Total, which is operator of licenses EA1 and EA1A, will in addition take over operatorship from Tullow of license EA2, enabling significant efficiency gains and synergies.

John Odyek