The government of Uganda made a deal with Total that will guide the involvement of Uganda National Oil Company (UNOC) in the crude oil export pipeline.
According to the agreement, Uganda National Oil Company (UNOC) will hold a 15 per cent stake in the project. It also shows in detail how the National Oil Company will finance its operation and participation of the over 1,400km Uganda-Tanzania pipeline.
In a press statement issued by Total, the company said that the agreement to allow the participation of UNOC in the pipeline project was reached between President Yoweri Museveni and Patrick Pouyanne, Total’s chairman and chief executive officer.
The managing director of Total E&P Pierre Jessua, said the decision is a major milestone that will lead to the Final Investment Decision (FID) for Uganda’s oil projects in the coming months.
“We now look forward to concluding a similar HGA (Host Government Agreement) with the Government of Tanzania and to completing the tendering process of all major engineering, procurement, and construction contracts,” he added.
He also added that the conditions are set for the ramp-up of project activities noting that land acquisition will resume.
“Total E&P reiterates its willingness to pursue a constructive dialogue with the communities and NGOs regarding all project activities,” the statement said
This meeting follows Total purchase of Tullow’s final 33.33 per cent stake in Uganda’s oil sector whose purchase had been approved by the seller’s shareholders.
Total purchased the assets for $575 million. Total, together with its Chinese partner, China National Offshore Oil Corporation (Cnooc), had agreed to buy Tullow’s 21.57 per cent for $900 million in 2017 to facilitate the long-awaited FID for the oil projects. The deal, however, collapsed in 2019 after Uganda and the oil companies failed to agree on the tax treatment of the transaction.
According to a press statement by Tullow the company said that; “The Cash Consideration consists of US$500 million payable at completion and US$75 million payable following FID of the Lake Albert Development Project. Additional cash consideration may be received by Tullow in the form of contingent payments which will be payable on upstream revenues from the Lake Albert Development Project, depending on the average annual Brent price once production commences”.
