24 August 2011, Sweetcude, Kampala – UK-based Tullow Oil said it expected to complete the farm-down of its acreage in Uganda’s Lake Albert Rift basin with Total and China National Offshore Oil Corporation (CNOOC) by September.
Tullow has been waited since early last year to finalise the deal which will see it farm-down its interest in each of its wholly-owned exploration areas EA-1, 2, and 3A to CNOOC and Total for $2.9 billion.
However, Tullow said “good progress” had been made in recent weeks, with most outstanding issues being resolved and it expected the deals to be wrapped up next month.
“While delays to the farm-down to CNOOC and Total have been frustrating, we now expect completion in September,” Tullow chief executive Aiden Heavey said.
The deal had been stalled due to a tax dispute between the Ugandan government and London-listed Heritage Oil related to the sale of Blocks 1 and 3A to Tullow.
In March the Ugandan government signed a memorandum of understanding with Tullow, separating the tax dispute from Tullow’s deals with Total and CNOOC.
Tullow had originally said it expected the farm-down deals to be completed within weeks of signing the sale and purchase agreements in March this year.
However, in its half year results on Wednesday the company said the process had “proved to be more time consuming than envisaged”.
