- A statement issued by the French oil major Total has revealed that a binding Tax Agreement on the lines of pre-agreed principles on the tax treatment of the sale of Tullow’s Ugandan assets to Total has been executed.
- Tullow has been waiting since 2017 to close its divestment in the Lake Albert Development Project.
A statement issued by the French oil major Total has revealed that a binding Tax Agreement on the lines of pre-agreed principles on the tax treatment of the sale of Tullow’s Ugandan assets to Total has been executed. The issue had delayed the sale of a $575 million stake that is key to ensuring the production of Uganda’s first oil in three years’ time. Tullow has been waiting since 2017 to close its divestment in the Lake Albert Development Project.
According to the agreement, Total will pay $500 million in cash on completion of the deal and $75 million when a final investment decision on the project is taken. The deal entitles Tullow to receive contingent payments linked to the oil price after production commences. The transaction is expected to close soon after completing certain customary pre-closing steps with Total.
Last month, Total, Uganda and Tanzania had agreed to fast track the oil pipeline EACOP deal. In September, 2019, Total had suspended its technical activities on the EACOP following the collapse of Tullow’s proposed sale of its Ugandan interests. Consensus could not be reached on the shareholding agreement and the legal framework for the pipeline. Total will have the lead role in developing the pipeline and the Lake Albert project alongside CNOOC Uganda Ltd, a subsidiary of the China National Oil Company.
