As per the deal, Tullow will transfer 21.57% of its 33.33% interests in Lake Albert project exploration licenses EA1, EA1A, EA2 and EA3A in Uganda to Total.

Initially, Total will pay $100m in cash and another $100m is split equally when the project gets approval and when it first starts pumping oil.

Tullow will use the remaining $700m in deferred consideration to fund its share of the costs in the project.

In April 2016, the Uganda government agreed to export Lake Albert oil through a pipeline (EACOP) via Tanzania to the port of Tanga.

Total chairman and CEO Patrick Pouyanné said: “Following the agreement on the Tanzanian export pipeline route, this transaction gives Total a leadership position to move this project efficiently toward final investment decision (FID) in the current attractive cost environment, while providing strong alignment and a pragmatic financing scheme for our partner Tullow.

“Our increased share in the Lake Albert project will bring significant value to Total and fits with our strategy of acquiring resources for less than 3$/b with upside potential.”

Total is already the operator of licenses EA1 and EA1A while the latest deal allows it to take over operatorship from of license EA2 from Tullow.

Upon completion of the deal, Total will have 54.9% interest in the project, which is expected to have peak production capacity of around 230,000 barrels of oil per day (bopd).

The transaction is subject to customary regulatory and government approvals and to partner pre-emption rights.

FID on the Lake Albert Development project is expected in 2017 while production is scheduled to commence by the end of 2020.

Image: The Lake Albert project in Uganda will have peak production capacity of around 230,000 bopd. Photo: courtesy of Tullow Oil plc.