Tullow Oil’s planned $900 million partnership agreement in Uganda to partners Total and Chinese National Oil Company (CNOOC) International is off, contributing to a further delay in Lake Alberts oilfield development.
A press release released by the company indicates that Tullow Oil is looking for alternative means of reducing its stake in blocks in Uganda from 33% to around 11%, with the deadline for the sale and purchase agreements (SPA) with its partners expiring at the end of play on Thursday.
In a statement on Thursday, Tullow said the termination of the deals to sell off equal portions of its holdings in Ugandan blocks to its partners was “a result of being unable to agree on all aspects of the tax treatment of the transaction with the Government of Uganda”.
Tullow had earlier reached an agreement in principle on the treatment of capital gains tax related to the would-be transactions, but firming up of this agreement had stalled, which was one reason for the continued delay in the partners taking a final investment decision on the Tilenga and Kingfisher oilfield developments.
Total will operate Tilenga, while CNOOC International will operate the much smaller Kingfisher scheme.
@ Bandhiga Media