Total expects to make a final investment decision on the Ngiri, Jobi Rii, Gunya fields in the onshore Exploration Area 1 as early as the end of next year, according to Arnaud Breuillac, the president of exploration and production at France-based Total S.A.
The announcement was part of Breuillac’s presentation on the progress Total S.A. is making in exploration and production to the financial community in London, Thursday.
The Uganda project, part of an integrated project being undertaken with China National Offshore Oil Corp. and Tullow Uganda Operations Pty Limited, is one of “four projects which are quite representative of Total’s future in upstream,” according to Breuillac.
“We are preparing to launch a giant onshore oil project with more than one billion barrels to develop and we have recently achieved two major milestones,” said Breuillac on the Uganda project.
The first milestone is an agreement on the pipeline from Hoima in western Uganda to Tanga on the Tanzanian coast, he said. The second is the recent award of eight production licences to Total and its joint venture partner, Tullow.
“We are now launching the basic engineering studies of this 230,000 barrel-per-day project and we are actively moving towards an FID as early as at the end of next year in order to capture the benefit of cost deflation,” he said.
“I believe that these four giant projects that will fuel our future profitable gross are very representative of our strategy and very well-positioned on the merit curve when compared to other projects worldwide.”
Uganda’s energy minister awarded production licences for Exploration Area 1 and Exploration Area 2 to Total and Tullow on 30 August, after regulatory delays. A final investment decision on the projects was expected 18 months after the issuance of licences.
The two companies – together with China National Offshore Oil Corp., which operates in Exploration Area 3 (Kingfisher) – have an equal stake in the exploration areas.
The licences have a duration of 25 years and can thereafter be renewed for 5 more years.
The three companies are expected to spend over $8 billion in exploration and production activities for the licences, according to the energy ministry.