A fortnight after closing a deal where it offloaded its stake in the Albertine Grabben projects to French oil major Total, Tullow Oil has written to the Ugandan government to expedite transaction approvals that will see the company receive $500 million in the second half of this year.
On April 23, Tullow and Total signed a sale and purchase agreement, in which Tullow agreed to transfer its entire interests in Blocks 1, 1A, 2 and 3A in Uganda and the proposed East African Crude Oil Pipeline to Total Uganda for cash consideration of $575 million.
According to the agreement, Tullow was to receive $500 million upon completion of the transaction and $75 million when Uganda oil projects reach the Final Investment Decision of the upstream and midstream segments.
In April, Tullow agreed a lower value for its entire stake, but Mr Cazenove says the deal is fair given the collapse of oil prices yet the company will receive a big chuck of the purchase fee when the transaction is concluded.
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URA TAX RESOLVED
Tullow Uganda and Total Uganda now intend to sign a binding tax agreement with the Government of Uganda and the URA that reflects these principles to enable the Transaction to complete.
