Tullow Oil worker is seen at an oil exploration site in Bulisa district, Uganda. Last month, Total said it would cut its investment spending for 2020 by $3 billion and save $800 million this year on operating costs compared with 2019, instead of the $300 million previously announced. FILE PHOTO | REUTERS The $575 million deal was signed after long drawn-out talks with taxman over capital gains tax from the transaction.
Under the terms of the deal, Total will acquire all of Tullow’s existing 33.3334 per cent stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the EACOP.
With Tullow’s exit, the joint venture partners in Uganda’s oil now are Total and China National Offshore Oil Corporation (CNOOC).
Anglo-Irish firm Tullow Oil has signed a deal with French oil major Total to surrender all its interests in Uganda’s Lake Albert oil project for $575 million.
The announcement made on April 23, comes after long drawn-out negotiations and disagreements, which saw talks between Uganda Revenue Authority and the oil companies collapse over the assessment of the capital gains tax that Tullow was expected to pay from the sale of its assets in the Lake Albert project.
The disagreements saw Uganda and the joint-venture partners in the oil project miss the August 2019 deadline deadline they had set for Final Investment Decision (FID), prompting Total—the lead investor in the East Africa Crude Oil Pipeline—to suspend all activities on the $3.5 billion pipeline project.
Total chief executive Patrick Pouyanne said Tullow deal, which is expected to be concluded later this year, is a major development as it takes Uganda and its partners in the oil project back on course towards FID, and eventually production.
With Tullow’s exit, the joint venture partners in Uganda’s oil now are Total and China National Offshore Oil Corporation (CNOOC).
“We are pleased to announce that a new agreement has been reached with Tullow to acquire their entire interests in the Lake Albert development project for less than $2 per barrel in line with our strategy of acquiring long-term resources at low cost, and that we have an agreement with the Uganda government on the fiscal framework,” Mr Pouyanne said.
“This acquisition will enable us, together with our partner CNOOC, to now move the project forward toward FID, driving costs down to deliver a robust long-term project,” he added.
Uganda’s Minister for Energy Mary Goretti Kitutu welcomed the deal, […]
