Kampala, Uganda — 17 September 2012 – Total SA expects to drill eight exploration wells in Uganda by the end of 2013, and will spend about US $650 million on its exploration activities in the east African country during the course of the year.

Reuters reports that Total entered Uganda’s burgeoning petroleum industry early this year after it and China’s CNOOC took up a third each of British explorer Tullow Oil’s exploration assets in the country for a total of US$2.9 billion.

“Total E&P Uganda is currently continuing the exploration, delineation and appraisal campaign initiated by the previous operators,” company general manager Loic Laurandel told Reuters.

“The first oil exploration well will be drilled by the end of 2012, and eight new exploration wells will be drilled by the end of 2013,” added.

Uganda discovered oil along its border with the Democratic Republic of Congo (DRC) in 2006. Production had been expected to start early this year, but wrangling over tax and other issues delayed development.

Tullow Oil and the Ugandan government are negotiating how to best settle tax issues, and a hearing is scheduled for later this year if the company fails to reach a settlement with the revenue authority.

Laurandel confirmed that Total, which operates Block 1 on the northern tip of Lake Albert, will spend about US$650 million on exploration and appraisal drilling and seismic data acquisition by the end of next year.

Tullow says the refinery’s capacity should not exceed 60,000 barrels per day to be attractive to investors but the government wants a facility with a maximum output of 120,000 barrels per day.

Total supports the project but Laurandel said the company could not comment on whether it would invest in it or state its preferred size of facility, because disclosure of its position was likely to undermine discussions with the government.

“Sufficient resources exist (1.8 to 2.2 billion barrels) to deliver a plateau production rate of between 200 and 230,000 barrels per day in support of an appropriate sized refinery,” he added.

“We think that an international crude oil export pipeline, combined with an optimally sized refinery, will provide the maximum benefit to the wider Ugandan economy,” Laurandel concluded.

Source: Reuters Africa. For more information, click here.