Total E&P Reassures Uganda of its Commitment Following Entrance into Kenya’s Oil Rich Turkana

Total has written to Uganda assuring the country that it will not abandon the $3.55 billion heated crude oil pipeline through Tanzania after buying assets in neighbouring Kenya.

The news on the transaction between Total and Maersk Oil and Gas had caused panic in Uganda on the progress of the East Africa crude oil pipeline (EACOP) as the French giant had led efforts to reroute the earlier planned route through Kenya for Tanzania.

In a statement by Total boss Patrick Pouyanne in a statement reassured Uganda that the new developments would have ‘no impact’on the export pipeline from Hoima to Tanga launched by Uganda’s President Museveni and his Tanzanian counterpart, John Pombe Magufuli this month saying EACOP was the company’s priority.

“We are focused on Uganda and in Uganda we have progressed quite a lot on the project, with an agreement which has been signed between Uganda and Tanzania early August,” Pouyanne’s statement is quoted by an Ugandan daily.

Total adds it continues to proceed with plans to sanction the project in the first half of 2018 even as it continues to actively engage in the development of the South Lokichar basin in Kenya where it now has 25 percent participation in blocks 10BA, 10BB and 13T.

Following the farm-down by Tullow Oil in its Uganda assets Total holds the lion share of 54.9% interest, CNOOC 33.33% and Tullow Oil 11.76% in Uganda’s Exploration Areas 1, 1A, 2 and 3A. Under the farm-down agreement (which is subject to certain conditions, including the approval of the Government of Uganda) 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.  The other joint venture partner CNOOC Uganda Limited (CNOOC) has also notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and CNOOC. This means CNOOC will acquire 50% of the interests being transferred to Total on the same terms and conditions that were agreed between Tullow and Total (including as to the amount, structure and timing of the consideration payable to Tullow).