Summer is nearly over and I survived without an air conditioner. It may be the last summer that, is possible in London but there are always cooler climes in Canada where I spent a good part of August.
If you think Britain is the only country with political challenges, look around. Elections and any form of democracy (or lack of it) brings challenges (Hong Kong, Youngstown, Ohio, Ottawa, Canada). The people of East Africa are also expecting elections in the next year so. Bobi Wine in Uganda is apparently running against the incumbent Museveni.
However, no surprise, but a big disappointment was Tullow’s announcement on August 29thth, that the sale of a big portion of their interest in the Lake Albert oil development is now off. Total claimed they are still pursuing the development but Tullow is now planning to relaunch the sale process.
Tullow Oil plc (“Tullow”) announces it has been informed that its farm-down to Total and CNOOC will terminate at the end of today, 29 August 2019, following the expiry of the Sale and Purchase Agreements (SPAs).Read more
Here is one of the
“Despite the termination of this agreement, Total together with its partners CNOOC and Tullow will continue to focus all its efforts on progressing the development of the Lake Albert oil resources. The project is technically mature and we are committed to continuing to work with the Government of Uganda to address the key outstanding issues required to reach an investment decision. A stable and suitable legal and fiscal framework remains a critical requirement for investors”, declared Arnaud Breuillac, President Exploration & Production of Total.
Total’s interest will therefore remain at 33.3% on blocks EA1, EA2 and EA3 prior to the 15% national company back-in, Total being operator of the block EA1 which contains the largest part of the reserves. Total keeps the right to pre-empt any future transactions, in case any party divests part or all of its interest.Read more
This is all very complicated and clearly both sides are at loggerheads as we say in Canada. Some would think concessions are required all round but clearly the JV partners and Government have run out of support from their respective Boards/CEO’s/Presidents. FID is delayed again.
Meanwhile, elsewhere in Uganda, construction of downstream infrastructure such as a fuel storage and transport system at Bugiri-Bukasa continues with the intent to improve logistics of product coming from Mombasa in Kenya to Uganda bypassing dangerous road transport systems in the region.
In Kenya, the announcement that Kenya (Tullow) have sold their first cargo of crude oil after over a year of pilot production has created a lot of excitement in Kenya. However, trucking crude from one end of Kenya to the other (at Mombasa). Tullow, Total and Africa Oil are still trying to sort out financing to get to Final Investment Decision on the Lokichar development.
And in Sudan (Khartoum is the capital) CNPC, ONGC Videsh and Petronas partners(Greater Nile Operating Company) have relinquished Blocks 2A and 4N because of lack of receipts from the government for oil that has already been sold. IN South Sudan, CNPC has made a discovery in the Upper Nile State in Block 3.
Again, South Sudan is looking for alternative export routes through Ethiopia or Kenya’s LAMU corridor. The Dar Petroleum Operating Company is the operator with the usual consortium of CNPC, Petronas, and smaller shares held by Chinese and local interests. South Sudan is also aiming to licence additional acreage this year, so this bodes well for the brave and patient international industry. South Sudan conducted a major study of alternative export routes some years ago but civil war and costs and agreements resulted in no change from the current export through Sudan to the Red Sea at Port Sudan.