The best 007
JF-Expert Member
- Oct 6, 2019
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Uyo jamaa ni anaroho ya kichawi sn uyo, yn huyo ni the biggest sorcerer in this region.
Cost comparison SGR Kenya vs SGR Tanzania
Cost comparison SGR Kenya vs SGR Tanzania
- Thread starter Geza Ulole
- Start date
Teargass
JF-Expert Member
- Apr 23, 2018
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Unajua kusoma ama? Kama unajua basi assignment iko hapa chini 👇 👇
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
- 91,917
- Thread starter
- #7,263
Unajua kusoma ama? Kama unajua basi assignment iko hapa chini 👇 👇
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
As long as Total the 6th largest oil company in the World acquired the whole 33.3% from Tullow, i have no worries, the pipeline will be built and get connected to South Sudan and DRC oil fields! Mark my words!
Oil and Gas industry trends 2019: ranking the top 10
10. Phillips 66 – $111.46bn
Phillips66 achieved 95% refinery utilization during 2018. Image courtesy of Mike Mozart.
The Phillips 66 Company, which was created in 2012 by the spin-off of the midstream and downstream assets of ConocoPhillips, witnessed an 8.9% year-on-year revenue growth to $111.46bn in 2018.
The refining segment accounted for the highest share (60%) of the company’s revenue, followed by the marketing and specialties, midstream, and chemical segments.
In 2018, the company achieved a 95% refinery utilisation during the year, completed the US Gulf Coast petrochemicals project and launched the Sweeny Hub expansion project to add a 300 million barrels per day (Mbpd) NGL fractionation capacity. It also started the construction of 900Mbpd Gray Oak Pipeline during the same year.
9. Lukoil – $115.2bn
Lukoil operates s four refineries in Russia and three refineries in Europe. Image courtesy of NVO.
Russian multinational energy corporation Lukoil’s revenue for the 12 months ending September 2018 stood at $115.2bn. The company’s annual hydrocarbon production reached 828Mboe, with liquid hydrocarbons accounting for 80% of the overall production volumes.
Lukoil’s proven hydrocarbon reserves were estimated at 15.9 billion barrels of oil-equivalent at the end of 2018. The company’s upstream projects are located in 12 countries with a focus on Russia, Central Asia, and the Middle East.
Major growth projects for the company include the Filanovsky, Korchagin, and the Rakushechnoye fields in the Northern Caspian, the D41 field in the Baltic Sea, and the Kandym-Khauzak-Shady and Gissar fields in Uzbekhistan. Lukoil operates four refineries in Russia and three refineries in Europe.
8. Rosneft – $133.7bn
Rosneft is the biggest oil and gas company in Russia.
Rosneft, the biggest oil and gas company in Russia, boosted its revenue by 31.4% to $133.7bn in 2018. The company’s oil and liquids production increased by 2.1% to 4.7Mbpd, whereas its gas production averaged at 1.12Mboed during the year.
Refining throughput increased by 2% to 115Mt with the company’ 13 large refineries located in Russia accounting for 103.3Mt of refinery capacity.
Rosneft launched four greenfield projects with plateau production exceeding 140 million barrels during 2018. The projects include Taas-Yuryakh (Srednebotuobinskoye field stage 2), Tagul field, Russkoe field, and the Kuyumba field development.
7. Chevron – $158.9bn
Chevron announced a $20bn investment program for 2019, in December 2018.
US-based multinational energy corporation Chevron reported a 17.99% year-on-year revenue growth to $158.90bn in 2018. The company’s net oil-equivalent production in 2018 averaged at 2.93Mbpd, compared with 2.73Mbpd in 2017. The net liquid production was 1.78Mbpd, whereas the net natural gas production was 6.9bcfd.
With an average refinery input of 1.61Mbpd, the company’s sales of refined products stood at 2.6Mbpd. The company’s top six refineries in Singapore, Thailand and South Korea, as well as the US states of California and Mississippi, comprise more than 90% of its total crude oil refining capacity.
The company’s ongoing flagship projects include Gorgon, Wheatstone, Tengiz Expansion, Big Foot, Mafumeira Sul, Alder, and Angola LNG. In December 2018Chevron announced a $20bn ($17.3bn upstream and $2.5bn downstream) investment programme for 2019.
6. Total – $209.36bn
Total’s revenue increased by 22.08% to $209.36bn in 2018.
French energy company Total’s revenues increased by 22.08% to $209.36bn in 2018. The refinery and chemical segment contributed 44%, while the marketing and services segment accounted for 43%, and the exploration and production segment had a 5.25% share of the total revenue.
The company’s total hydrocarbon production increased by 8.1% to 2.78Mboe/d in 2018. Liquids production increased by 16% to 1.56Mbpd, while gas production decreased by 1% to 6.59bcfd. Its refinery throughput increased by 1% to 1.85Mbpd in the year.
The major project start-ups and ramp-ups during the year included the Egina field, Yamal LNG, Moho Nord, Fort Hills, Kashagan, Kaombo Norte, and Ichthys.
5. ExxonMobil – $290.2bn
ExxonMobil reported average petroleum product sales of 5.5mbd in 2018.
US-based oil and gas major ExxonMobil’s revenue increased by 18.76% to reach $290.2bn in 2018. The company produced 2.26Mbpd of liquids and 9.4 billion cubic metres (bcm) of natural gas a day in 2018.
With a refinery throughput of 4.27Mbpd, ExxonMobil reported average petroleum product sales of 5.5Mbpd in 2018. The US market accounted for 2.2Mbpd of the company’s petroleum product sales, while 1.55Mbpd was sold in the European market.
ExxonMobil made its final investment decision to develop the West Barracouta gas field in Bass Strait to bring gas supplies to the Australian domestic market. It also secured LNG offtake commitments for its upcoming Rovuma LNG project in Mozambique during the year.
4. BP Plc – $298.75bn
BP reported $298.756bn of revenue in 2018.
British multinational oil and gas company BP registered a 24.37% year-on-year revenue growth in 2018, earning $298.75bn. Revenues from its downstream business increased by 23.88% to $270.11bn, whereas the upstream segment’s revenues witnessed a 30.92% growth to reach $27.83bn.
The company’s upstream production increased by 8.2% to an average of 3.7 million barrels of oil-equivalent a day (Mboed) in 2018. Crude oil sales contributed $65.27bn of revenue, whereas oil products contributed $195.466bn and natural gas, LNG, and natural gas liquids (NGLs) contributed $21.74bn to the revenue.
BP established six major upstream projects in 2018, namely Clair Ridge, Western Flank B, Thunder Horse Northwest Expansion, Shah Deniz Stage Two, Taas-Yuryakh Expansion, and Atoll Phase One.
3. China National Petroleum Corp (CNPC) – $346bn
CNPC’s listed arm PetroChina is the biggest oil and gas producer in China. Image courtesy of Charlie fong.
State-owned China National Petroleum Corp (CNPC) reported a 25% year-on-year growth to achieve $346bn operating revenue in 2027, out of which CNPC’s listed unit PetroChina contributed $298bn.
The biggest oil and gas producer of the country, PetroChina produced 1.1 billion barrels of oil and gas-equivalent in the first three quarters of 2018, which was a 2.2% increase compared with the same period in 2017. The company’s marketable gas output increased by 4.8% to 2.66 trillion cubic feet (tcf) during the same period.
CNPC operates 26 refineries with a combined crude processing capacity of 152 million tonnes per year (Mtpa) and an oil and gas pipeline infrastructure spanning 85,582km. Its overseas exploration and production activities are also spread across 38 countries in Africa, Central Asia, Russia, South America, the Middle East, and Asia-Pacific.
2. Royal Dutch Shell – $388.37bn
Royal Dutch Shell’s operating revenue was up by 27.26% to $388.379bn in 2018. Image courtesy of P.L. van Till.
British-Dutch oil and gas company Royal Dutch Shell’s operating revenue was up by 27.26% to reach $388.37bn in 2018. The company’s downstream business registered a 26.42% year-over-year growth to reach $334.68bn and accounted for 86.17% of the total revenue.
The company’s integrated gas business, which includes liquid natural gas (LNG) marketing and trading, as well as gas-to-liquids projects grew by 25.34% to $43.764bn and accounted for 11.27% of the total operating revenue.
Shell’s upstream earnings increased by 1.99% to $9.89bn because of the higher realised oil and gas prices during the year, despite the 2% reduction in its upstream production.
1. China Petroleum & Chemical Corporation (Sinopec) – $426bn
Sinopec’s refinery and distribution segment accounts for approximately 60% of its revenue in 2018. Image courtesy of WhisperToMe.
China Petroleum & Chemical Corporation, also known as Sinopec Group, registered a 22.09% year-over-year growth to achieve RMB2.8tn ($426bn) of operating revenue in 2018. The company’s refinery and distribution segment accounted for approximately 60% of the revenue. Its refinery throughput during the year increased by 2.31% to 244 million tonnes (Mt). The total domestic sales volume of refined oil products increased by 1.4% to 180.24Mt.
The other business segments of the company include oil and gas exploration and production, petroleum engineering, chemical marketing, petrochemical refining and refined products marketing, engineering and construction, and international trade.
Sinopec’s crude oil production decreased by 1.75% to 288.51 million barrels, while natural gas production increased by 7.08% to 977bcf during the year. Sinopec is an integrated energy and chemical company incorporated in the People’s Republic of China.
Largest oil and gas companies: Ranking the top 10
Teargass
JF-Expert Member
- Apr 23, 2018
- 20,648
- 17,772
Methuselah the pipeline is not viable.As long as Total the 6th largest oil company in the World acquired the whole 33.3% from Tullow, i have no worries, the pipeline will be built and get connected to South Sudan and DRC oil fields! Mark my words!
Oil and Gas industry trends 2019: ranking the top 10
10. Phillips 66 – $111.46bn
Phillips66 achieved 95% refinery utilization during 2018. Image courtesy of Mike Mozart.
The Phillips 66 Company, which was created in 2012 by the spin-off of the midstream and downstream assets of ConocoPhillips, witnessed an 8.9% year-on-year revenue growth to $111.46bn in 2018.
The refining segment accounted for the highest share (60%) of the company’s revenue, followed by the marketing and specialties, midstream, and chemical segments.
In 2018, the company achieved a 95% refinery utilisation during the year, completed the US Gulf Coast petrochemicals project and launched the Sweeny Hub expansion project to add a 300 million barrels per day (Mbpd) NGL fractionation capacity. It also started the construction of 900Mbpd Gray Oak Pipeline during the same year.
9. Lukoil – $115.2bn
Lukoil operates s four refineries in Russia and three refineries in Europe. Image courtesy of NVO.
Russian multinational energy corporation Lukoil’s revenue for the 12 months ending September 2018 stood at $115.2bn. The company’s annual hydrocarbon production reached 828Mboe, with liquid hydrocarbons accounting for 80% of the overall production volumes.
Lukoil’s proven hydrocarbon reserves were estimated at 15.9 billion barrels of oil-equivalent at the end of 2018. The company’s upstream projects are located in 12 countries with a focus on Russia, Central Asia, and the Middle East.
Major growth projects for the company include the Filanovsky, Korchagin, and the Rakushechnoye fields in the Northern Caspian, the D41 field in the Baltic Sea, and the Kandym-Khauzak-Shady and Gissar fields in Uzbekhistan. Lukoil operates four refineries in Russia and three refineries in Europe.
8. Rosneft – $133.7bn
Rosneft is the biggest oil and gas company in Russia.
Rosneft, the biggest oil and gas company in Russia, boosted its revenue by 31.4% to $133.7bn in 2018. The company’s oil and liquids production increased by 2.1% to 4.7Mbpd, whereas its gas production averaged at 1.12Mboed during the year.
Refining throughput increased by 2% to 115Mt with the company’ 13 large refineries located in Russia accounting for 103.3Mt of refinery capacity.
Rosneft launched four greenfield projects with plateau production exceeding 140 million barrels during 2018. The projects include Taas-Yuryakh (Srednebotuobinskoye field stage 2), Tagul field, Russkoe field, and the Kuyumba field development.
7. Chevron – $158.9bn
Chevron announced a $20bn investment program for 2019, in December 2018.
US-based multinational energy corporation Chevron reported a 17.99% year-on-year revenue growth to $158.90bn in 2018. The company’s net oil-equivalent production in 2018 averaged at 2.93Mbpd, compared with 2.73Mbpd in 2017. The net liquid production was 1.78Mbpd, whereas the net natural gas production was 6.9bcfd.
With an average refinery input of 1.61Mbpd, the company’s sales of refined products stood at 2.6Mbpd. The company’s top six refineries in Singapore, Thailand and South Korea, as well as the US states of California and Mississippi, comprise more than 90% of its total crude oil refining capacity.
The company’s ongoing flagship projects include Gorgon, Wheatstone, Tengiz Expansion, Big Foot, Mafumeira Sul, Alder, and Angola LNG. In December 2018Chevron announced a $20bn ($17.3bn upstream and $2.5bn downstream) investment programme for 2019.
6. Total – $209.36bn
Total’s revenue increased by 22.08% to $209.36bn in 2018.
French energy company Total’s revenues increased by 22.08% to $209.36bn in 2018. The refinery and chemical segment contributed 44%, while the marketing and services segment accounted for 43%, and the exploration and production segment had a 5.25% share of the total revenue.
The company’s total hydrocarbon production increased by 8.1% to 2.78Mboe/d in 2018. Liquids production increased by 16% to 1.56Mbpd, while gas production decreased by 1% to 6.59bcfd. Its refinery throughput increased by 1% to 1.85Mbpd in the year.
The major project start-ups and ramp-ups during the year included the Egina field, Yamal LNG, Moho Nord, Fort Hills, Kashagan, Kaombo Norte, and Ichthys.
5. ExxonMobil – $290.2bn
ExxonMobil reported average petroleum product sales of 5.5mbd in 2018.
US-based oil and gas major ExxonMobil’s revenue increased by 18.76% to reach $290.2bn in 2018. The company produced 2.26Mbpd of liquids and 9.4 billion cubic metres (bcm) of natural gas a day in 2018.
With a refinery throughput of 4.27Mbpd, ExxonMobil reported average petroleum product sales of 5.5Mbpd in 2018. The US market accounted for 2.2Mbpd of the company’s petroleum product sales, while 1.55Mbpd was sold in the European market.
ExxonMobil made its final investment decision to develop the West Barracouta gas field in Bass Strait to bring gas supplies to the Australian domestic market. It also secured LNG offtake commitments for its upcoming Rovuma LNG project in Mozambique during the year.
4. BP Plc – $298.75bn
BP reported $298.756bn of revenue in 2018.
British multinational oil and gas company BP registered a 24.37% year-on-year revenue growth in 2018, earning $298.75bn. Revenues from its downstream business increased by 23.88% to $270.11bn, whereas the upstream segment’s revenues witnessed a 30.92% growth to reach $27.83bn.
The company’s upstream production increased by 8.2% to an average of 3.7 million barrels of oil-equivalent a day (Mboed) in 2018. Crude oil sales contributed $65.27bn of revenue, whereas oil products contributed $195.466bn and natural gas, LNG, and natural gas liquids (NGLs) contributed $21.74bn to the revenue.
BP established six major upstream projects in 2018, namely Clair Ridge, Western Flank B, Thunder Horse Northwest Expansion, Shah Deniz Stage Two, Taas-Yuryakh Expansion, and Atoll Phase One.
3. China National Petroleum Corp (CNPC) – $346bn
CNPC’s listed arm PetroChina is the biggest oil and gas producer in China. Image courtesy of Charlie fong.
State-owned China National Petroleum Corp (CNPC) reported a 25% year-on-year growth to achieve $346bn operating revenue in 2027, out of which CNPC’s listed unit PetroChina contributed $298bn.
The biggest oil and gas producer of the country, PetroChina produced 1.1 billion barrels of oil and gas-equivalent in the first three quarters of 2018, which was a 2.2% increase compared with the same period in 2017. The company’s marketable gas output increased by 4.8% to 2.66 trillion cubic feet (tcf) during the same period.
CNPC operates 26 refineries with a combined crude processing capacity of 152 million tonnes per year (Mtpa) and an oil and gas pipeline infrastructure spanning 85,582km. Its overseas exploration and production activities are also spread across 38 countries in Africa, Central Asia, Russia, South America, the Middle East, and Asia-Pacific.
2. Royal Dutch Shell – $388.37bn
Royal Dutch Shell’s operating revenue was up by 27.26% to $388.379bn in 2018. Image courtesy of P.L. van Till.
British-Dutch oil and gas company Royal Dutch Shell’s operating revenue was up by 27.26% to reach $388.37bn in 2018. The company’s downstream business registered a 26.42% year-over-year growth to reach $334.68bn and accounted for 86.17% of the total revenue.
The company’s integrated gas business, which includes liquid natural gas (LNG) marketing and trading, as well as gas-to-liquids projects grew by 25.34% to $43.764bn and accounted for 11.27% of the total operating revenue.
Shell’s upstream earnings increased by 1.99% to $9.89bn because of the higher realised oil and gas prices during the year, despite the 2% reduction in its upstream production.
1. China Petroleum & Chemical Corporation (Sinopec) – $426bn
Sinopec’s refinery and distribution segment accounts for approximately 60% of its revenue in 2018. Image courtesy of WhisperToMe.
China Petroleum & Chemical Corporation, also known as Sinopec Group, registered a 22.09% year-over-year growth to achieve RMB2.8tn ($426bn) of operating revenue in 2018. The company’s refinery and distribution segment accounted for approximately 60% of the revenue. Its refinery throughput during the year increased by 2.31% to 244 million tonnes (Mt). The total domestic sales volume of refined oil products increased by 1.4% to 180.24Mt.
The other business segments of the company include oil and gas exploration and production, petroleum engineering, chemical marketing, petrochemical refining and refined products marketing, engineering and construction, and international trade.
Sinopec’s crude oil production decreased by 1.75% to 288.51 million barrels, while natural gas production increased by 7.08% to 977bcf during the year. Sinopec is an integrated energy and chemical company incorporated in the People’s Republic of China.
Largest oil and gas companies: Ranking the top 10
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
- 91,917
- Thread starter
- #7,265
From the horse mouth!Methuselah the pipeline is not viable.
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
TOTAL ACQUIRES TULLOW ENTIRE INTERESTS IN THE UGANDA LAKE ALBERT PROJECT
23/04/2020
News
Paris – Total and Tullow have entered into an Agreement, through which Total shall acquire Tullow’s entire interests in Uganda Lake Albert development project including the East African Crude Oil Pipeline.
The overall consideration paid by Total to Tullow will be $575M, with an initial payment of $500M at closing and $75M when the partners take the Final Investment Decision to launch the project. In addition, conditional payments will be made to Tullow linked to production and oil price, which will be triggered when Brent prices are above $62/bbl. The terms of the transaction have been discussed with the relevant Ugandan Government and Tax Authorities and agreement in principle has been reached on the tax treatment of the transaction.
Under the terms of the deal, Total will acquire all of Tullow’s existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP) System. The transaction is subject to the approval of Tullow’s shareholders, to customary regulatory and government approvals and to CNOOC’s right to exercise pre-emption on 50% of the transaction.
“We are pleased to announce that a new agreement has been reached with Tullow to acquire their entire interests in the Lake Albert development project for less than 2$/bbl in line with our strategy of acquiring long-term resources at low cost, and that we have an agreement with the Uganda government on the fiscal framework,” said Patrick Pouyanné, Total Chairman and CEO. “This acquisition will enable us, together with our partner CNOOC, to now move the project forward toward FID, driving costs down to deliver a robust long-term project.”
* * *
About Total
Total is a major energy player that produces and markets fuels, natural gas and low-carbon electricity. Our 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, our ambition is to become the responsible energy major.
Total Contact
- Media Relations: +33 1 47 44 46 99 l presse@total.com l @TotalPress
- Investors Relations: +44 (0)207 719 7962 l ir@total.com
This press release, from which no legal consequences may be drawn, is for information purposes only. The entities in which TOTAL S.A. directly or indirectly owns investments are separate legal entities. TOTAL S.A. has no liability for their acts or omissions. In this document, the terms “Total”, “Total Group” and Group are sometimes used for convenience. Likewise, the words “we”, “us” and “our” may also be used to refer to subsidiaries in general or to those who work for them. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TOTAL S.A. nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.
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Total Acquires Tullow Entire Interests in the Uganda Lake Albert Project
Teargass
JF-Expert Member
- Apr 23, 2018
- 20,648
- 17,772
Do you know how to read?
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
- 91,917
- Thread starter
- #7,267
CNOOC has just 33.3% stake that can be bought out anytime by a company that sits at 6th position in World largest pil companies in the World!Do you know how to read?
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Total to dominate sector with Lake Albert oil projects
SUNDAY MAY 31 2020
The offices of the China National Offshore Oil Corporation in Uganda. It is not clear why the company opted out of pre-emption to acquire 50pc of Tullow’s assets in the joint Albertine oil projects. PHOTO | AFP
In Summary
- Tullow agreed to the sale of its entire assets in Uganda to Total for $575 million.
- Experts say that once all approvals are received from Total’s shareholders and then from the relevant Uganda government agencies.
- The country’s oil projects are expected to proceed towards final investment decision on the key oil infrastructure which puts the country and its partners back on course for first oil.
By JULIUS BARIGABA
More by this Author
French oil major Total stands to dominate Uganda’s oil sector through its ownership of 66.66 per cent of Lake Albert oil projects. They are expected to go into production in 2022/2023, with China National Offshore Oil Company (CNOOC) retaining one-third of the once three-way joint venture with Tullow.
Total’s fortunes were shored up by CNOOC’s announcement last week that it will not exercise its pre-emption rights in a deal where Tullow will sell its assets to Total. The deal is expected to conclude later this year.
“CNOOC Uganda Ltd has informed both Tullow and Total that it will not pre-empt the sale of Tullow’s assets in Uganda to Total,” said Tullow in a May 28 statement.
This news follows the April 23 announcement that Tullow had agreed to the sale of its entire assets in Uganda to Total for $575 million, subject to consent from CNOOC.
As per joint partner agreement between the three players in Uganda’s Lake Albert oil projects, CNOOC “had rights of pre-emption to acquire 50 per cent of these assets on the same terms and conditions as Total.”
It is not clear why CNOOC opted out of pre-emption, with sources at the company’s Kampala office saying the “decision was made at the headquarters level.”
“We are also waiting for headquarters to update us on this decision,” they added.
AWAITING APPROVAL
The remaining phase of the transaction awaits approval first from the company’s shareholders and then from the relevant Uganda governments agencies — which has previously proved a tougher hurdle.
Shareholder approval is certain considering that during the company’s annual general meeting held last month on the same day that Tullow announced its deal with Total, Tullow executive chair Dorothy Thompson said that industry challenges and the firm’s debt situation dictated the sale of its Uganda assets.
“I am very pleased with the material progress Tullow has made in the first quarter of this year given the challenges facing the group after our performance in 2019, the Covid-19 pandemic and very low oil prices recently.
“Last week, we announced two significant milestones with the agreement to sell our Uganda interests to Total for $575 million in cash and the appointment of our new CEO, Rahul Dhir. The sale of our Uganda assets is an excellent first step towards our target of raising over $1 billion of proceeds to reduce net debt, strengthen the balance sheet and secure a more conservative capital structure,” said Ms Thompson.
Yet this sale value represents a downgrade on a deal Tullow had reached with Total and CNOOC in 2017 to sell only a chunk of its assets for $900 million, and which would have seen the company remain with a 11.76 per cent stake.
The deal fell through after talks between the oil companies and Uganda government’s tax body collapsed over the assessment of the capital gains tax that Tullow was expected to pay from the sale of 21.57 per cent of its assets in the Lake Albert project.
With shareholder approval assured, Tullow’s bigger hurdle is to get other approvals from Uganda’s tax body, an agency that the oil firm has had court battles with over capital gains tax for the farm down of its assets to Total and CNOOC.
Total to dominate sector with L. Albert oil projects
Teargass
JF-Expert Member
- Apr 23, 2018
- 20,648
- 17,772
Cnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
- 91,917
- Thread starter
- #7,269
Total to dominate sector with Lake Albert oil projectsCnooc questions investment in oil pipeline
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
SUNDAY MAY 31 2020
The offices of the China National Offshore Oil Corporation in Uganda. It is not clear why the company opted out of pre-emption to acquire 50pc of Tullow’s assets in the joint Albertine oil projects. PHOTO | AFP
In Summary
- Tullow agreed to the sale of its entire assets in Uganda to Total for $575 million.
- Experts say that once all approvals are received from Total’s shareholders and then from the relevant Uganda government agencies.
- The country’s oil projects are expected to proceed towards final investment decision on the key oil infrastructure which puts the country and its partners back on course for first oil.
By JULIUS BARIGABA
More by this Author
French oil major Total stands to dominate Uganda’s oil sector through its ownership of 66.66 per cent of Lake Albert oil projects. They are expected to go into production in 2022/2023, with China National Offshore Oil Company (CNOOC) retaining one-third of the once three-way joint venture with Tullow.
Total’s fortunes were shored up by CNOOC’s announcement last week that it will not exercise its pre-emption rights in a deal where Tullow will sell its assets to Total. The deal is expected to conclude later this year.
“CNOOC Uganda Ltd has informed both Tullow and Total that it will not pre-empt the sale of Tullow’s assets in Uganda to Total,” said Tullow in a May 28 statement.
This news follows the April 23 announcement that Tullow had agreed to the sale of its entire assets in Uganda to Total for $575 million, subject to consent from CNOOC.
As per joint partner agreement between the three players in Uganda’s Lake Albert oil projects, CNOOC “had rights of pre-emption to acquire 50 per cent of these assets on the same terms and conditions as Total.”
It is not clear why CNOOC opted out of pre-emption, with sources at the company’s Kampala office saying the “decision was made at the headquarters level.”
“We are also waiting for headquarters to update us on this decision,” they added.
AWAITING APPROVAL
The remaining phase of the transaction awaits approval first from the company’s shareholders and then from the relevant Uganda governments agencies — which has previously proved a tougher hurdle.
Shareholder approval is certain considering that during the company’s annual general meeting held last month on the same day that Tullow announced its deal with Total, Tullow executive chair Dorothy Thompson said that industry challenges and the firm’s debt situation dictated the sale of its Uganda assets.
“I am very pleased with the material progress Tullow has made in the first quarter of this year given the challenges facing the group after our performance in 2019, the Covid-19 pandemic and very low oil prices recently.
“Last week, we announced two significant milestones with the agreement to sell our Uganda interests to Total for $575 million in cash and the appointment of our new CEO, Rahul Dhir. The sale of our Uganda assets is an excellent first step towards our target of raising over $1 billion of proceeds to reduce net debt, strengthen the balance sheet and secure a more conservative capital structure,” said Ms Thompson.
Yet this sale value represents a downgrade on a deal Tullow had reached with Total and CNOOC in 2017 to sell only a chunk of its assets for $900 million, and which would have seen the company remain with a 11.76 per cent stake.
The deal fell through after talks between the oil companies and Uganda government’s tax body collapsed over the assessment of the capital gains tax that Tullow was expected to pay from the sale of 21.57 per cent of its assets in the Lake Albert project.
With shareholder approval assured, Tullow’s bigger hurdle is to get other approvals from Uganda’s tax body, an agency that the oil firm has had court battles with over capital gains tax for the farm down of its assets to Total and CNOOC.
Total to dominate sector with L. Albert oil projects
Teargass
JF-Expert Member
- Apr 23, 2018
- 20,648
- 17,772
Cnooc questions investment in oil pipelineTotal to dominate sector with Lake Albert oil projects
SUNDAY MAY 31 2020
The offices of the China National Offshore Oil Corporation in Uganda. It is not clear why the company opted out of pre-emption to acquire 50pc of Tullow’s assets in the joint Albertine oil projects. PHOTO | AFP
In Summary
- Tullow agreed to the sale of its entire assets in Uganda to Total for $575 million.
- Experts say that once all approvals are received from Total’s shareholders and then from the relevant Uganda government agencies.
- The country’s oil projects are expected to proceed towards final investment decision on the key oil infrastructure which puts the country and its partners back on course for first oil.
By JULIUS BARIGABA
More by this Author
French oil major Total stands to dominate Uganda’s oil sector through its ownership of 66.66 per cent of Lake Albert oil projects. They are expected to go into production in 2022/2023, with China National Offshore Oil Company (CNOOC) retaining one-third of the once three-way joint venture with Tullow.
Total’s fortunes were shored up by CNOOC’s announcement last week that it will not exercise its pre-emption rights in a deal where Tullow will sell its assets to Total. The deal is expected to conclude later this year.
“CNOOC Uganda Ltd has informed both Tullow and Total that it will not pre-empt the sale of Tullow’s assets in Uganda to Total,” said Tullow in a May 28 statement.
This news follows the April 23 announcement that Tullow had agreed to the sale of its entire assets in Uganda to Total for $575 million, subject to consent from CNOOC.
As per joint partner agreement between the three players in Uganda’s Lake Albert oil projects, CNOOC “had rights of pre-emption to acquire 50 per cent of these assets on the same terms and conditions as Total.”
It is not clear why CNOOC opted out of pre-emption, with sources at the company’s Kampala office saying the “decision was made at the headquarters level.”
“We are also waiting for headquarters to update us on this decision,” they added.
AWAITING APPROVAL
The remaining phase of the transaction awaits approval first from the company’s shareholders and then from the relevant Uganda governments agencies — which has previously proved a tougher hurdle.
Shareholder approval is certain considering that during the company’s annual general meeting held last month on the same day that Tullow announced its deal with Total, Tullow executive chair Dorothy Thompson said that industry challenges and the firm’s debt situation dictated the sale of its Uganda assets.
“I am very pleased with the material progress Tullow has made in the first quarter of this year given the challenges facing the group after our performance in 2019, the Covid-19 pandemic and very low oil prices recently.
“Last week, we announced two significant milestones with the agreement to sell our Uganda interests to Total for $575 million in cash and the appointment of our new CEO, Rahul Dhir. The sale of our Uganda assets is an excellent first step towards our target of raising over $1 billion of proceeds to reduce net debt, strengthen the balance sheet and secure a more conservative capital structure,” said Ms Thompson.
Yet this sale value represents a downgrade on a deal Tullow had reached with Total and CNOOC in 2017 to sell only a chunk of its assets for $900 million, and which would have seen the company remain with a 11.76 per cent stake.
The deal fell through after talks between the oil companies and Uganda government’s tax body collapsed over the assessment of the capital gains tax that Tullow was expected to pay from the sale of 21.57 per cent of its assets in the Lake Albert project.
With shareholder approval assured, Tullow’s bigger hurdle is to get other approvals from Uganda’s tax body, an agency that the oil firm has had court battles with over capital gains tax for the farm down of its assets to Total and CNOOC.
Total to dominate sector with L. Albert oil projects
- May 26, 2020
- Written by Jeff Mbanga
Cnooc workers in the field
Cnooc Uganda Limited has up to the end of May to decide whether it will buy half of the stake from Tullow Oil Uganda, nearly three months after the Chinese company wrote to Uganda’s energy officials casting doubt about the business viability of the East African Crude Oil pipeline.
On April 23, Tullow Oil announced that it had agreed to sell its entire stake in Uganda’s Albertine graben and interest in the East African Crude pipeline to Total E&P Uganda for $575 million, and that it had received government’s approval after more than three years of negotiating for it.
The agreement, however, allows Cnooc Uganda to preempt its right to buy half of what Tullow is selling in its fields in Hoima, 200km from the capital Kampala.
Now attention turns to the haggling over the project economics informing any financial decision to be taken towards building the crude oil pipeline from Hoima to southern Tanzania in the Chongoleani peninsula.
As their next move, Total and Cnooc are to embark on scraping through a couple of agreements before signing an integrated Financial Investment Decision (FID) for the oil industry, quite possibly in the second quarter of 2021.
The projects for which the FID will be signed include: the crude oil pipeline, Cnooc’s Kingfisher field and Total’s Tilenga oil development project. Combined, the three projects require between $10 billion and $15 billion, the biggest investment in the country’s history.
However, Cnooc appears to be growing cold feet.
“With regard to the crude oil pipeline project, which has been led by Total, Cnooc is concerned that the project is not yet investable or bankable and the participation percentage will largely depend on the economic return and the bankability,” Zhao Shunqiang, the president of Cnooc Uganda Limited, wrote to Goretti Kitutu, Uganda’s minister of Energy and Mineral Development, in February.
There is no information pointing to Total feeling the same way, although this would not be the first time that the two companies have not been on the same page in how Uganda’s oil project should progress. The two companies, together with the Uganda National Oil Company, remain partners in Uganda’s oil project.
Shunqiang asked for a meeting with Kitutu to resolve some of the issues that would facilitate movement towards FID. It is not clear whether any meeting has taken place or if Cnooc’s concerns have been resolved, considering the country has been under lockdown since late March as a result of the fight against the spread of coronavirus disease (Covid-19).
Cnooc gave the impression that it is hard to buy Tullow Oil’s stake if the numbers surrounding the crude oil pipeline do not make economic sense. Just what informs Cnooc’s line of thought is hard to tell.
Cnooc listed a dozen of issues that need to be resolved before it could take part in any financial decision for the pipeline. Some of these issues touch on agreements on contracts sur-rounding the recovery of costs, stable legal regimes and the issue of grand-fathering, the return on investments, and taxation.
In the past, however, both Total and Cnooc have questioned the amount of crude that needs to be pumped through the pipeline every day, and the tariff they will charge to move the product.
While government insists on a proposed 30,000 barrels of oil refinery to have the first call on crude oil resources, the oil companies wish to have more than the agreed 212,000 barrels of oil to be pumped through the pipeline. The less oil shipped out, the higher the tariff, which will largely be borne by the final consumer.
Uganda has so far discovered six billion barrels of oil, with anywhere between one billion and 1.4 billion of that said to be recoverable.
If Cnooc does not buy Tullow Oil’s stake, it would weaken the Chinese firm’s influence in the geopolitics of the region. It is not just the pumping of crude that is at stake but also the money and political influence that comes with the engineering, procurement and construction contracts.
Geza Ulole
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Dar SGR station
Courtesy: Ichoboy
#Akilizahandshake#
CC: Zigi Rizla Kafrican Depay Yosef Festo Teargass Tony254 pingli-nywee komora096 Edward Wanjala kikihboy
nomasana, sam999, NairobiWalker, hbuyosh, msemakweli, simplemind, Kimweri, Bulldog, MK254, Kafrican, Ngongo, Ab_Titchaz, mtanganyika mpya, JokaKuu, Ngongo, Askari Kanzu, Dhuks, Yule-Msee, waltham, Mzee, mombasite gabriel, Juakali1980, Boda254, mwaswast, MwendaOmo, Iconoclastes, oneflash, Kambalanick, 1 Africa, saadeque, burukenge, nyangau mkenya, Teen-Upperhill Nairobi, kadoda11
Courtesy: Ichoboy
#Akilizahandshake#
CC: Zigi Rizla Kafrican Depay Yosef Festo Teargass Tony254 pingli-nywee komora096 Edward Wanjala kikihboy
nomasana, sam999, NairobiWalker, hbuyosh, msemakweli, simplemind, Kimweri, Bulldog, MK254, Kafrican, Ngongo, Ab_Titchaz, mtanganyika mpya, JokaKuu, Ngongo, Askari Kanzu, Dhuks, Yule-Msee, waltham, Mzee, mombasite gabriel, Juakali1980, Boda254, mwaswast, MwendaOmo, Iconoclastes, oneflash, Kambalanick, 1 Africa, saadeque, burukenge, nyangau mkenya, Teen-Upperhill Nairobi, kadoda11
Geza Ulole
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The best 007
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Heheheheheeee huu umeme ni wa volt kubwa mno msiguse mtaungua [emoji3][emoji3]
Geza Ulole
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Teargass
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All cargo destined for Uganda, Rwanda, DRC and South Sudan are transported by train from Mombasa to Naivasha, what`s your take on that?
Geza Ulole
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That's not my question! Ur GoK has now come out to claim the Chinese r expensive!
Teargass
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Were you not the same person who was celebrating here that Ugandan cargo won`t be transported by train up to Naivasha? What`s your take now that the cargos are transported by train?
Geza Ulole
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Teargass
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Talk of a truck owner, we don`t care about them anyway.