Tullow signs new production agreement with Uganda govt

03 February 2012, Sweetcrude, KAMPALA – Tullow Oil of the United Kingdom has signed new production sharing agreements (PSAs) with the Uganda government.

It is good news, coming despite the continued stalling of its planned farm-out of its stakes in some oil blocks in the East African country.

Tullow’s proposes a $2.9 billion sale of stakes in three blocks to China National Offshore Oil Corporation (CNOOC) and France’s Total, which has failed to materialise over disageements on contractual terms.

Tullow said in a statement on Friday that it has signed PSAs with the Ugandan government for the EA-1 and Kanywataba licences in the Lake Albert Rift basin, and has also been awarded the Kingfisher production licence.

“As a result of this signing, Tullow will now finalise arrangements with CNOOC and Total for completion of the farm-down and the related transfer of monies as soon as possible,” the company said.

A Tullow spokesman confirmed that the signing of the two PSAs for EA-1 and Kanywataba had “resolved all outstanding issues related to the farm-downs in the three blocks and all parties were now happy for the process to go through”.

Chief executive Aidan Heavey said: “Today’s signing is a vital step towards the development of the Lake Albert Rift basin and the oil and gas industry in Uganda and East Africa.”

The London-listed company’s share price rose on the news by about 55pence, or 3.7%, and was trading at £14.95 ($23.70) at 09:46 GMT.

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