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Total to acquire Tullow interests in Uganda at $575 million
Mr Patrick Pouyanné, Total Chairman and CEO
Total will acquire Tullow’s entire interests in Uganda Lake Albert development project including the East African Crude Oil Pipeline.
According to a Thursday statement by Total, the overall consideration paid by Total to Tullow will be $575 million, with an initial payment of $500 million at closing and $75 million when the partners take the Final Investment Decision to launch the project.
“We are pleased to announce that a new agreement has been reached with Tullow to acquire their entire interests in the Lake Albert development project for less than 2$/bbl 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,” Mr Patrick Pouyanné, Total Chairman and CEO said. “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.”
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/bbl.
“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,” the statement reads in part.
Under the terms of the deal, Total will acquire all of Tullow’s existing 33.3334 percent 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, according to the statement, 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 percent of the transaction.
Total is a major energy player that produces and markets fuels, natural gas and low-carbon electricity. The company operates in more than 130 countries.
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