Tullow Uganda deal finalised

TULLOW OIL HAS finalised its sale and purchase agreements with French oil major Total and Chinese group CNOOC over fields in Uganda’s Lake Albert Rift basin.

 

Under the deal, Tullow will sell one third each of its 100 per cent owned interests in Exploration Areas (EA) 1, 2, and 3A in Uganda to the two companies for US$2.9bn.

In an announcement, Total said it would pay about US$1.5bn for its interest, and would become operator of Block 1 subject to government approval.

 

Total exploration and production president Yves-Louis Darricarrère said this was a strategic move in line with the company’s aim to be bolder in exploration and production

“With this acquisition, we have entered a new oil province, giving us access to substantial proven resources and high-potential acreage,” he said.

 

“The size of the discoveries indicates that large-scale development may be possible. Plateau production could exceed 300,000 bpd, depending on the results of the future drilling programme.”

 

The sale was a key part of a memorandum of understanding signed between Tullow, the Government of Uganda and the Uganda Revenue Authority earlier this month, which wrapped up a long standing legal battle on the correct capital gains tax payout from Tullow after it acquired to stakes from former partner Heritage Oil.

 

Under the agreement, the three companies were granted new licences over EA-1 and an onshore area of EA-3A, as well as confirming the partnership's rights to develop the Kingfisher discovery on the latter block.

 

The companies would reactivate their planned exploration program and appraisal drilling and progress their development plans for the basin, Tullow said.

 

Tullow chief executive Aidan Heavey said the parties to the deal would work with the Ugandan government to put together a development plan with a targeted production level of at least 200,000bpd.

 

“We are looking forward to working with CNOOC and Total, and continuing our strong relationship with the Government to bring the benefits of the oil to the people of Uganda," he said.

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