Total Predicts Uganda to Become Distribution Hub for E. Africa



DOHA (Dow Jones Newswires), Dec. 7, 2011

Uganda could become an oil distribution hub for East Africa, including South Sudan's oil exports, if plans for an oil pipeline from the country to the Kenyan coast proceed, Total Chief Executive Christophe de Margerie said Wednesday.

"Just look at the geography. It's easy to see that Uganda is just next to Sudan with a common border," he told reporters at the World Petroleum Congress in Doha, Qatar. "The pipe which is supposed to leave from our potential blocks in Uganda could be effectively a hub for different sources of crude," he said.

This would be an important development for South Sudan, which recently separated from the rest of the country after years of conflict. It is still forced to rely a pipeline running north through Sudan to export its oil.

The two countries have failed to agree on oil transit fees after negotiations led by the African Union, prompting the north to halt exports of South Sudan's oil. It exports about 350,000 barrels of oil a day, mostly to Asia.

Total has agreed to buy into oil licenses owned by Tullow Oil in Uganda's Lake Albert area. The deal hasn't concluded, but the companies are already planning a pipeline to export Lake Albert's oil to world markets.

"We say to Uganda, as part of our long term view, that you have to take into consideration what kind of oil could come from neighbors' countries to make your pipe less expensive if it can be shared by different players."

He declined to say if the Ugandan government supported this idea.

De Margerie made clear that such plans were in very early stages. "It's just thoughts. Total doesn't have yet any production in south Sudan," he said.

Copyright (c) 2011 Dow Jones & Company, Inc.



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