Total SA expects to drill eight exploration wells in Uganda by end of next year, and will spend about $650 million (Sh54.6 billion) on its activities in the same period, a senior company official said.
Total entered Uganda’s burgeoning petroleum industry early this year after it and China’s China’s CNOOC took up a third each of British explorer Tullow Oil’s exploration assets in the country for a total of $2.9 billion (Sh 244billion).
“The first oil exploration well will be drilled by the end of 2012 and eight new exploration wells will be drilled by the end of 2013.”
Uganda discovered oil in its west along the border with the Democratic Republic of Congo, in 2006. Production had been expected to start early this year but wrangling over tax and other issues delayed development.
Tullow Oil and the government are negotiating how to best settle tax issues and a hearing is scheduled for later this year if the company fails to reach a settlement with the revenue authority. Laurandel said Total, which operates block 1 on the northern tip of Lake Albert, will spend about $650 million on exploration and appraisal drilling and seismic data acquisition by the end of next year.
Uganda has said it was searching for an advisor to help it secure financing for a planned refinery to process its crude.Tullow says the refinery’s capacity should not exceed 60,000 barrels per day to be attractive to investors but the government wants a facility with a maximum output of 120,000 barrels per day is viable and can easily attract investors.
Total supports the project but Laurandel said the company could not comment on whether it will invest in it or state its preferred size of facility because disclosure of its positions was likely to undermine discussions with the Government. “Sufficient resources exist (1.8-2.2 billion barrels) to deliver a plateau production rate of 200-230,000 barrels per day in support of an appropriate sized refinery,” he said.