Total Expects First Oil From Ugandan Project in 2025

   By Nicholas Bariyo 
 

KAMPALA, Uganda--French oil giant Total SE said it expects to start commercial oil production from its Ugandan oil fields by early 2025.

As much as $10 billion is required to develop the oil fields and build a 900-mile export pipeline to tap around 1.4 billion barrels of crude from Uganda's western border with the Democratic Republic of Congo, according to the company's chief executive Patrick Pouyanne's remarks delivered Sunday in Uganda's lakeside city of Entebbe, where Ugandan and Tanzanian leaders signed several agreements to clear the project.

Total's latest projection is less optimistic than an earlier prediction of first commercial oil by 2024, as the landlocked nation grapples with the delayed commercialization of its crude fields, first discovered in 2006. Moody's Investor Service expected the commercialization of the oil fields to significantly boost Uganda's growth.

The project, which will involve the construction of a $3.5 billion pipeline to the Tanzanian port of Tanga on the Indian Ocean, cements Total's position as the leading player in East Africa, where years of exploration activities have led to the discovery of large crude and natural-gas reserves.

Uganda's President Yoweri Museveni and Tanzania's President Samia Hassan signed a joint agreement to allow the construction of the 230,000 barrels-per-day pipeline project. Tanzania and Uganda signed another deal capping oil pipeline transit fees at $12.7 per barrel.

Total holds a majority stake in the Ugandan oil project, which is being jointly developed with China's Cnooc Ltd.

South Africa's Standard Bank and Japan's Sumitomo Mitsui Banking Corp. are helping to raise credit to fund the pipeline project.

Write to Nicholas Bariyo at [e-mail]

(END) Dow Jones Newswires

April 12, 2021 00:45 ET (04:45 GMT)

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