Uganda Clears Tullow Sale to Total
Uganda's government has approved London-listed Tullow Oil's sale of its interests in the country's Lake Albert development to France's Total for $575mn, Tullow said on October 21. It aims to raise $1bn from asset sales to shore up its weak finances, expects the deal's completion in a few days.
The government and its revenue authority have also agreed on the tax treatment of the transaction, first announced in April.
"With all the government-related conditions to closing having been satisfied, Tullow expects the transaction to close in the coming days after completing certain customary pre-closing steps with Total," Tullow said.
Total will pay Tullow $500mn on the deal's closing and a further $75mn when a final investment decision is taken on Lake Albert's development. Tullow owns 33.3% stakes in Ugandan blocks 1, 1A, 2 and 3A as well as the East African Crude Oil Pipeline, due to pump the project's oil from western Uganda to the Tanzanian port of Tanga. Total and China's Cnooc also control a third of the project each.
After struggling with operational setbacks for years, Tullow's problems worsened with the collapse of oil prices earlier this year and it is restructuring.