Tullow Oil, in January this year, agreed to transfer 21.57 percent of its 33.33 percent interests in Lake Albert Development Project covering exploration areas 1, 1A, 2 and 3A to Total for a total consideration of USD 900 million 3.27 trillion Shillings.
The larger burden of the MoU falls onto the government which is expected to construct a 60,000 barrels-per day refinery, approve the studies and surveys for an export pipeline and also to initiate discussions with neighbouring countries for the path of the oil pipeline. The three oil companies in return will give governmentâ€™s refinery the right of first call on production volumes, supply crude oil for power generation and also endorse and support governmentâ€™s refinery project.
Of the ten applications, only one production license has been issued, in September 2013, and that is for the Kingfisher Discovery currently being operated by CNOOC. Uganda is estimated to have discoveries estimated at 3.5 billion barrels with potential extraction being 1.2 billion barrels.
â€œThis is an important milestone not only for Total E&P Uganda, but also for its joint venture partners CNOOC and Tullow because the FDP approval will lead to the next stage in the oil and gas cycle, the development stage and ultimately to production,â€ read the statement.