Total will automatically retain a major oil licence for its Ugandan operations.
The news follows a new oil discovery in the northern section of Uganda's oil-rich Lake Albertine Rift basin prior to the exploration licence expiry date of 3rd February. Further appraisal will be needed to determine the oil field's potential, but the news means the licence will be renewed. Total co-owns the rights to the bloc with China's CNOOC and Ireland's Tullow Oil.
As reported last year, Total stated it would spend $300 million on exploration and appraisal programs in Uganda, however the latest discovery has almost certainly given the partners greater confidence to invest in the exploring the coutnry's resources.
Total, Cnooc and Tullow are now expected to spend around $10 billion-$12 billion on developing the oil fields, but the start of production has been delayed because Uganda insists that most of the oil is refined into fuel products locally, initially for domestic consumption and then for regional markets. The exploration companies, on the other hand, want to sell crude on the open market.