Total and Tullow have entered into a package agreement under which Total will acquire an additional 21.57% interest from Tullow in the Uganda Lake Albert oil project.
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, representing a reimbursement of a portion of past costs, payable in installments along the development of the project, with an initial payment of $100M at closing.
 “Following the agreement on the Tanzanian export pipeline route, this transaction gives Total a leadership position to move this project efficiently toward FID in the current attractive cost environment, while providing strong alignment and a pragmatic financing scheme for our partner Tullow,” said Patrick Pouyanné, Total Chairman and CEO. “Our increased share in the Lake Albert project will bring significant value to Total and fits with our strategy of acquiring resources for less than 3$/b with upside potential.
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 already operator of licenses EA1 and EA1A, will in addition take over operatorship from Tullow of license EA2, enabling significant efficiency gains and synergies.
Closing of the transaction is subject to customary regulatory and government approvals and to partner pre-emption rights.
Total in Uganda:
Total has been present in Uganda since 1955 in Marketing and Services with today over 150 service stations across the country and an overall market share of 24%. It is present in Upstream oil since 2011 after acquiring from Tullow a 33.33% interest in the licenses EA1, EA1-A, EA2, and EA3 covering the Lake Albert Oil discoveries. Total is then approved by the Government of Uganda to operate oil exploration and production activities in licenses EA1 and EA1-A
In April 2016, the Government of Uganda decided to export the Lake Albert oil through a pipeline (EACOP) via Tanzania to the port of Tanga. And in August 2016, the production licences for EA1 and EA2 were formally granted. The Uganda Joint Venture is now commencing the FEED (Front End Engineering and Design) phase for the Upstream and the EACOP pipeline.

Uganda: President Readies Son for Succession, Major Oil Project Progresses

From Stratfor

Late Jan. 9, Ugandan President Yoweri Museveni named his son a senior presidential adviser for special operations. Muhoozi Museveni, age 42, will give up his post as commander of the Ugandan army’s special operations forces to fulfill his new role, which will reportedly include leading presidential security and critical military installations around the country.

It has been assumed for years that the elder Museveni, in office since 1986, is grooming his son for succession, possibly in 2021 when elections will be held. Through his father, Muhoozi has gained significant experience in Uganda’s military, arguably the country’s most important institution. His new role as a senior presidential adviser will provide him the experience in politics and government that will prove critical in the years ahead as President Museveni begins the process of ceding power.

As Uganda takes a small step toward political transition, its energy sector is also progressing. Gulf Interstate Engineering Company announced Jan. 9 that it would undertake the engineering design study for the Uganda-Tanzania oil pipeline project, which will stretch an estimated 1,445 kilometers (897 miles) and will cost an estimated $4 billion — a hefty price tag due to Uganda’s waxy crude oil. According to reports, Uganda, Tanzania and oil companies Total SA, Tullow Oil PLC, and China National Offshore Oil Corp. will fund the eight-month study.

Meanwhile, it was announced Jan. 9 that Total SA has agreed to buy part of Tullow Oil PLC’s 33.33 percent stake in all of the Lake Albert development licenses, EA1, EA1A, EA2 and EA3A. Total SA is already the operator of licenses EA1 and EA1A and will take over operations of license EA2. The purchase will reportedly enable Total SA to increase its production and boost its reserves by 2020, which will be crucial if the company is accurate in its prediction that low energy prices will eventually create a production shortage. Regardless, the pipeline project is several years away from fruition, and it will likely not begin producing oil for export until sometime in the 2020s. By then, Uganda could be going through its much-awaited presidential transition. The timing would give Museveni’s chosen successor, likely his son, the funds needed to secure the support of allies and to foment political patronage.

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