Petroleum Africa
Find us on: 
Thursday, April 23, 2020
The sale has come at a critical time for Tullow who has been on the decline since last year’s disappointing exploration results offshore Guyana, continued setbacks in Ghana, delayed projects and the ongoing saga in Uganda since acquiring the assets back in 2006. The sale will go a long way in helping Tullow hang on during the COVID era and continued plummet in oil demand.
Net proceeds from the Transaction will be used to reduce net debt, strengthening
According to a release by French major Total, the company and Tullow Oil have entered into an agreement, through which Total shall acquire Tullow’s entire interests in Uganda’s Lake Albert development project including the East African Crude Oil Pipeline.
The sale has come at a critical time for Tullow who has been on the decline since last year’s disappointing exploration results offshore Guyana, continued setbacks in Ghana, delayed projects and the ongoing saga in Uganda since acquiring the assets back in 2006. The sale will go a long way in helping Tullow hang on during the COVID era and continued plummet in oil demand.
Net proceeds from the Transaction will be used to reduce net debt, strengthening Tullow’s balance sheet, reducing ongoing financing costs and moving Tullow towards a more conservative capital structure
The overall consideration paid by Total to Tullow will be $575 million, with an initial payment of $500 million at closing and $75 million when the partners take the Final Investment Decision to launch the project. In addition, conditional payments will be made to Tullow linked to production and oil price, which will be triggered when Brent prices are above $62 per barrel. The terms of the transaction have been discussed with the relevant Ugandan Government and Tax Authorities and agreement in principle has been reached on the tax treatment of the transaction.
Under the terms of the deal, Total will acquire all of Tullow’s existing 33.3334% stake in each of the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed East African Crude Oil Pipeline (EACOP) System. The transaction is subject to the approval of Tullow’s shareholders, to customary regulatory and government approvals and to CNOOC’s right to exercise pre-emption on 50% of the transaction.
“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,” said Patrick Pouyanné, Total Chairman and CEO. “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.”
" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">
" alt="United Energy Acquires Western Desert Producer APEX">
" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">
" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">
" alt="Tullow Highlights 2025 Operational Plans in Ghana">
" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">
" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">
" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">
