Oil company Total’s $5bn investment in Uganda will further extend the French company’s dominance in Africa, investing more than twice as much as any other producer in sub-Saharan Africa.
According to financial news agency Bloomberg, Total is expected to make a final decision to invest €4.2 billion in the Uganda project within days, confirming its status as the largest investor in the region since 2012.
Investments in exploration and production peaked eight years ago at $6.2 billion, and even in the wake of the crisis, the oil company already has planned investments of $1.9 billion by 2021, according to data from consultancy Wood Mackenzie, more than double that of any other international producer.
Uganda’s investment includes construction of a pipeline to transport over 1 billion barrels to the east African coast, with production due to begin in 2024, which should keep Total as the leading oil company in sub-Saharan Africa.
According to Rystad Energy analyst Pareul Chopra, Total should remain the leader until 2025, and when North Africa is included, only Italy’s ENI can match the French oil company’s figures, vying for the lead.
As well as Uganda, the Mozambique project should also start to bear fruit towards the middle of the decade, despite the insecurity in the country.
Total also has projects planned in the two biggest oil producers in sub-Saharan Africa, Nigeria and Angola, over the next few years, and from there, “spending will start to relax,” concludes Woodmac analyst Adam Pollard.
Total posted record losses of $7,242 million last year, a “transformation year” with a view to a strategic reorientation focused on new energies, which compares with profits of €9,312 million recorded in 2019.
This result of the French oil company was caused by the negative effects of the Covid-19 pandemic on economic activity and the historic drop in oil prices, Total justified earlier this year.
