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Tullow-Total Farm-Down Pushed To December

Tullow Plc the parent company to Tullow Operations Uganda says the conclusion of the farm-down will contribute 200m to its expected 700 million cash flow by end of the year.
19 Nov 2018 15:38
Tullow PTY Uganda Managing Director, Jimmy Mugerwa chating with an officia from the Nowegian Embassy
Tullow Oil Plc, one of the Joint Venture Partners in Uganda's oil sector says the farm-down to Total is expected to close at close of this year.

The farm-down of Tullow's assets to Total had been expected to be complete by December 2017

Tullow Plc the parent company to Tullow Operations Uganda says the conclusion of the farm-down will contribute $200m to its forecasted $700 million cash flow by end of the year.

Tullow Plc Chief Executive Officer, Paul Mcdade in his November 2018 trading statement said development in Uganda were on track with Final Investment Decision (FID) expected for first half of 2019.

The delay by the Joint Venture Partners Total Exploration Uganda, CNOOC and Tullow has partly been the reason the government dropped its first oil 2020 ambitions.

Tullow Oil, in January last year agreed to transfer 21.57 per cent of its 33.33 per cent interests in Lake Albert Development Project covering exploration areas 1, 1A, 2 and 3A to Total for a total consideration of $900 million (about Shs 3.27 trillion).

Another industry player, CNOOC Uganda Limited (CNOOC) in February 2017 notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and CNOOC to acquire 50 per cent of the interests being transferred to Total on the same terms and conditions that were agreed between Tullow and Total.

The total consideration for the transaction includes $200 million (about Shs 720 billion) in cash consisting of $100 million (about Shs 360 million) on completion of the transaction and $50 million (Shs 180 billion) at both final investment decision and first oil production.

A source that has been close to the farm-down process told URN that the companies already notified the government about the proposed farm-down.

According to the source, Energy and Mineral Development Minister, Irene Muloni is yet to grant approval for the farm-down to be completed.