KAMPALA – Tullow Oil says it has completed the sale of its assets in Uganda to Total at a sum of $500 million. The sale according to a statement by the Irish oil company was concluded earlier today from Total following receipt of payment.
Tullow says it expects to receive a further $75 million when a Final Investment Decision is taken on the development project. It also expects contingent payments linked to the oil price payable after production commences.
The statement says the closing of this transaction follows the satisfaction of all deal conditions, announced on 21 October 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 operator-ship for Block 2.
Tullow Oil Chief Executive Officer, Rahul Dhir says 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.
Rahul Dhir commented today saying the closing of the 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” said Rahul Dhir.
“We will watch the progress of Uganda’s oil and gas industry with much interest and all of us at Tullow wish the people and government of Uganda and our former joint venture partners every good fortune as they take this important project forward.”
Tullow now has a net debt of $2.4 billion and available liquidity of $1 billion. Rahul Dhir, CEO and Les Wood, CFO, will lay out their plans for the group in the coming days at a Capital Markets Day on 25 November 2020.