[ 2011-04-09 ]

Tullow seals $2.9 billion deal
Tullow Oil plc (Tullow) an affiliate of Tullow Oil
Ghana, last week signed Sale and Purchase
Agreements (SPAs) with CNOOC and Total in respect
of the sale of a one third interest to each party
of the interests Tullow holds in Exploration Areas
1, 2 and 3A in Uganda, in a deal which include a
total cash consideration payable to Tullow of
US$2.9 billion.

A release announcing the deal said Tullow will
retain a one third interest. The signing of the
SPAs, satisfies a key condition of the Memorandum
of Understanding (MoU) agreed among Tullow, the
Government of Uganda (GoU) and the Uganda Revenue
Authority (URA) on March 15, 2011.

Tullow is now to make certain tax related payments
to the GoU, on receipt of which all relevant
consents become final and the other provisions of
the MoU become effective.

Under the MoU, Tullow and its new Partners, CNOOC
and Total, have been granted new licences over
EA-1 and an onshore area of EA-3A and the
partnership's rights to develop the Kingfisher
discovery have been confirmed. A clear plan for
the resolution of tax disputes on the various
asset sales has been agreed by the GoU, the URA
and Tullow.

Tullow and its Partners will now reactivate the
significant programme of exploration and appraisal
drilling and progress their development plans for
the basin which they will jointly present to the
Government of Uganda for approval. Commenting on
the deal, Aidan Heavey, Chief Executive, said:

"These agreements have secured the future of oil
production in Uganda. Tullow, its partners and the
Government of Uganda will now agree a development
plan for the Lake Albert Rift Basin with a target
of delivering production of at least 200,000 bopd
and potentially much more as we continue to
explore and appraise the basin. We are looking
forward to working with CNOOC and Total, and
continuing our strong relationship with the
Government to bring the benefits of the oil to the
people of Uganda."

Source - Business Analyst

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