KAMPALA – Total expects to pump commercial oil production from its fields in Uganda to start from 2017, a year later than previous estimates had suggested, as the foreign firms charged with developing the country's nascent energy sector try to overcome a host of issues that have delayed operations.
Total entered Uganda earlier this year after a long-delayed deal by British wildcatter Tullow Oil PLC to sell two-thirds of its exploration assets in the country to the French major and China's Cnooc Ltd. was finally approved.
"We are working closely with our partners and the Ugandan government to get the necessary approvals to enable us deliver first oil by late 2017," said Loic Laurandel, Total E&P Uganda's general manager told reporters Friday.
However, Mr. Laurandel's assessment of when oil production will commence is a full year later than initially hoped. When the partners completed the $2.6 billion deal in February, Tullow Oil Exploration Director Angus McCoss said first oil should come by 2016.
The hold-up has been due in large part to wrangling between the Ugandan government and the partners over how the fields should be developed and the crude best used. The partners can only begin operations in earnest once the government approves its development plan. First commercial oil will likely arrive 36 months after the approval of the development plan, Tullow has said.
Total, which plans to invest about $650 million in exploration and appraisal drilling in Uganda by the end of next year, expects initial output of around 20,000 barrels of a day from its block on the northern tip of Lake Albert. This will gradually rise before reaching 200,000 to 230,000 barrels a day by 2020, said Mr. Laurandel.
According to Mr. Laurandel, Total will also seek more exploration licenses in Uganda once the country opens the next licensing round, expected later this year or early next year.
"We are committed to extend our stay in Uganda as much as we can, we shall definitely seek more licenses," Mr. Laurandel added.
Uganda has six unlicensed oil blocks and at least 10,000 square kilometers of relinquished acreage in the Lake Albertine Rift basin which will be auctioned during the next licensing round.
The next licensing round will be commenced after the enactment of three oil bills, which are currently before parliament.
Copyright (c) 2012 Dow Jones & Company, Inc.
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