Tullow Oil announced on Tuesday that the sale of its assets in Uganda to Total has completed with $500 million consideration received. Tullow is also due to receive a further $75 million 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 which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow’s interests to Total and the transfer of operatorship for Block 2.
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 licences in Uganda after 16 years of operations in the Lake Albert basin.
Tullow now has net debt of $2.4 billion and available liquidity of $1 billion. The company said Rahul Dhir, CEO, and Les Wood, CFO, will lay out their plans for the Group in the coming years at a Capital Markets Day on 25 November 2020.
“The closing of our transaction with Total clearly evokes mixed emotions within Tullow. While we are sad to be exiting Uganda after many years, the $575 million of proceeds form an important part of our plan to strengthen Tullow’s balance sheet and improve our financial position,” Rahul Dhir, Chief Executive Officer of Tullow Oil said.
He said Tullow will watch the progress of Uganda’s oil and gas industry with much interest and the company wishes the people and Government of Uganda and former Joint Venture Partners good fortune as they take the important project forward.
In Guyana, Tullow is the operator at the Orinduik block with a 60% stake, while Total and Eco Atlantic each hold 15% and Qatar Petroleum has the remaining 10%.
