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.