Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Uganda tax deal paves way for Tullow sale to Total

Aerial shot of a drilling rig on the side of a lake
Lake Albert drilling

Tullow Oil has reached a binding tax agreement with Uganda, which should allow it to close a sale to Total shortly.

The Minister of Energy and Mineral Development has also approved the transfer of the equity, and the operatorship, in Block 2 to the French company. The government and the Ugandan Revenue Authority have approved the tax agreement.

All governmental conditions have now been met, Tullow said. As such, the transaction should close “in the coming days” after certain customary steps have been completed.

Total will pay Tullow $500 million on closing. The French company will then pay $75mn when it reaches a final investment decision (FID). Oil price movements may trigger additional payments, once production has started. The transfer will have an effective date of January 1, 2020.

Tax disputes have thrown up problems in Uganda in the past. A failure to reach an agreement with the government scuppered Tullow’s first efforts to sell down its assets in the country.

Tullow did not disclose how much tax it expected to pay. In April, the company expected the tax on capital gains to be $14.6mn.

Falling prices

In addition to derailing its first attempt at a sale, Tullow also ran into problems when it acquired Heritage Oil in 2010. The company agreed to pay around $1.5 billion for a 50% stake in the three licences, while the Ugandan government asked for capital gains tax of $405mn.

Tullow paid the tax and then had to take Heritage to court to get the cash back.

Total and CNOOC Ltd farmed in to the three blocks for $2.9bn. Following this, the three companies had 33.3% each.

Recommended for you

More from Energy Voice

Latest Posts