Tullow Oil says Total, CNOOC buy Uganda assets for $2.9bn - Daily Nation

Tullow Oil says Total, CNOOC buy Uganda assets for $2.9bn

Wednesday March 30 2011

Drilling for oil in western Uganda. Photo/FILE

Drilling for oil in western Uganda. Photo/FILE 


Anglo-Irish energy firm Tullow Oil said Wednesday that it has agreed to sell part of its Uganda assets to France's Total and China's CNOOC for a total of $2.9 billion (2.06 billion euros).

The announcement should clear the way for a $10-billion refinery in the oil-rich Lake Albert region of the east African country.

"Tullow Oil plc is delighted to announce that yesterday it signed sale and purchase agreements with CNOOC and Total in respect of the sale of a one third interest to each party of the interests Tullow holds in exploration areas 1, 2 and 3A in Uganda," it said in a statement.

"The terms of the transactions include a total cash consideration payable to Tullow of US$2.9 billion."

Tullow, which is a major player in Africa, will retain a one-third stake and will also make "certain tax-related payments" to the Ugandan government.

It added: "A clear plan for the resolution of tax disputes on the various asset sales has been agreed by the government of Uganda, the Uganda Revenue Authority and Tullow."

Uganda's total reserves are estimated at 2.5 billion barrels, and the new refinery, once fully operational, should could churn out more than 200,000 barrels of oil per day (bopd).

"These agreements have secured the future of oil production in Uganda," said Tullow chief executive Aidan Heavey in the statement.

"Tullow, its partners and the government of Uganda will now agree a development plan for the Lake Albert rift basin with a target of delivering production of at least 200,000 bopd and potentially much more as we continue to explore and appraise the basin.

"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."

Tullow has operations across 23 countries in four core regions that comprise Africa, Europe, South Asia and South America.

In Africa, the group has interests in a host of countries that include Angola, Congo, Equatorial Guinea, Gabon, Ghana, Ivory Coast, Mauritania and Uganda.