Total hikes stake in Tullow Ugandan project

Total SA said it expects “a project sanction in the near future” after agreeing to pay Tullow Oil PLC $900 million for a 21.57% interest the companies’ Lake Albert joint venture in Uganda.
Jan. 9, 2017

Total SA said it expects “a project sanction in the near future” after agreeing to pay Tullow Oil PLC $900 million for a 21.57% interest the companies’ Lake Albert joint venture in Uganda (OGJ Online, June 24, 2008).

Total’s interest in the oil-development project will rise to 54.9%. The company acquired its original interest from Tullow in 2011.

Tullow retains a 11.76% interest in the venture’s licenses: Exploration Areas 1, 1A, 2, and 3A. The interest is subject to reduction to 10% when the Ugandan government exercises back-in rights.

The government removed an impediment to development of Lake Albert discoveries last April when it selected a route through Tanzania for an essential oil export pipeline (OGJ Online, Apr. 25, 2016).

Tullow expects its project with Total to achieve plateau production of 230,000 b/d. The government approved development last August.

Total’s consideration to Tullow in the new transaction includes an initial payment of $100 million, payments of $50 million when a final investment decision is made and when production starts, and reimbursement of past costs in installments tied to development progress.

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