British oil company Tullow Oil yesterday (Tuesday) announced that the sale of its assets in Uganda to Total has been completed with the US$500m consideration received earlier in the day.
In a statement posted on its website, Tullow said it is due to receive a further $75m when a Final Investment Decision is taken on the development project plus contingent payments linked to the oil price payable after production commences.
“The closing of this transaction follows the satisfaction of all deal conditions, announced on October 21, 2020, which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operations for Block 2,” the statement said.
Although Tullow will retain a financial link to the development project through the potential contingent payments, the closing of this transaction marks Tullow’s exit from its licenses in Uganda after 16 years of operation in the Lake Albert basin, the statement said.
Tullow now has net debt of $2.4 billion and available liquidity of $1b, Mr Rahul Dsaid with Mr Les Wood, CFO, saying they will lay out their plans for the Group in the coming years at a Capital Markets Day on 25 November 2020.
“While we are sad to be exiting Uganda after many years, the $575m of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” Mr Rahul Dhir, Tullow Oil Plc’s Chief Executive Officer said.
Uganda has discovered so far 1.6 billion barrels of oil and commercial production is projected to start in 2023.