By Abdul Rahman Bangura–
NEW AFRICA DAILY NEWS (NADN) Freetown, Sierra Leone- Uganda’s Tullow Oil on November 11th, 2020 announces, it has finished off the transaction of its investments in Uganda to Total at a sum of $500 million. The sale according to an assertion by the Irish oil company, was inferred earlier today from Total pursuing receipt of payment.
On the same vein, Tullow explains it foresees to earn a further $75 million when a Final Investment Decision is taken on the development project. It also awaits possible earnings related to the oil price expected after proceeds starts. The announcement discloses the culmination of this transaction fulfills the achievement of all deal conditions, published on October 21st, 2020, which comprised the undertaking 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 mumbles although Tullow will maintain a financial link to the development project through the possible payments, the close of this transaction marks Tullow’s exit from its licenses in Uganda after 16 years of operations in the Lake Albert basin. Rahul Dhir stated, the ending of the transaction with Total certainly induces mixed feelings 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” stated 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 November 25th, 2020.
For New Africa Daily News Abdul Rahman Bangura Reports, Africa Correspondent