Total buys Tullow’s interests in Lake Albert project

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Total chairman and Chief Executive Officer, Mr Patrick Pouyanne

Total has agreed with Tullow to acquire all Tullow’s interests in developing Lake Albert project including the East African Crude Oil Pipeline (EACOP).

The overall consideration paid by Total to Tullow will be $575m with an initial payment of $500m at closing and $75m when the partners will take a Final Investment Decision (FID) to launch the project.

The deal translates into shs2 trillion.

In a press release issued today, Total will make conditional payments to Tullow linked to production and oil prices which will be triggered when Brent prices are above $62 per barrel.

Transaction terms have been discussed with Uganda’s tax authorities while the agreement has been reached in principle on the tax treatment of the transaction.

According to the agreement, Total will acquire all Tullow’s existing 33.3334 percent stake in each of the Lake Albert project licences. These include EA1, EA1A, EA2 and EA3A and the proposed 1,445km EACOP that will transport crude oil from Kabaale- Hoima in Uganda to the Chongoleani peninsula near Tanga in Tanzania for export to the international market.

The terms of the deal further state that the transaction is subject to the approval of Tullow’s shareholders, customary regulatory and government approvals and to China National Offshore Oil Corporation (CNOOC’s) right to exercise pre-emption on the 50 percent of the transaction.

The EACOP is a 1,445km crude oil export pipeline that will transport Uganda’s crude oil from Kabaale-Hoima in Uganda to Chongoleani peninsular near Tanga Port in Tanzania to the international market.

The terms of the deal further state that the transaction is subject to the approval of Tullow’s shareholders, customary regulatory and government approvals and to China National Offshore Oil Corporation (CNOOC’s) right to exercise pre-emption on the 50 percent of the transaction.

Total chairman and Chief Executive Officer, Mr Patrick Pouyanné, announced the agreement while in Paris, France, saying:

“………a new agreement has been reached with Tullow to acquire their entire interests in the Lake Albert development project for less than 2$/bbl in line with our strategy of acquiring long-term resources at low cost, and we have an agreement with the Uganda government on the fiscal framework.”

Mr Pouyanné added that the agreement will push forward that long-term project.

“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, Mr Pouyanné continued.

Thousands of jobs will be created in the construction phase of the EACOP.

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