Cnooc, China's largest offshore oil explorer, and France's Total, Europe's third-largest oil company, will pay a combined $2.9 billion to acquire stakes in Ugandan exploration blocks from U.K.-based Tullow Oil. The exploration blocks are located in the oil-rich Lake Albert region of the African country.
Cnooc (CEO), which is also China's third-largest oil company, will pay about $1.7 billion for stakes to one-third in exploration blocks 1, 2 and 3A in Uganda. The three companies expect production in the Lake Albert Basin to eventually rise to 200,000 barrels of oil per day.
Total (TOT) will also acquire one-third interests in the blocks. Cnooc's expansion into Uganda will give the company its second foothold in Africa. The company already does business in Nigeria.
''The transaction signifies another milestone for Cnooc Limited to grow its overseas business by entering into Lake Albert Rift Basin, one of the key frontier basins in East Africa,'' Cnooc CEO Yang Hua said in a statement issued by the company. Tullow estimates 1 billion barrels of oil have been discovered in the Lake Albert region since 2006.