British oil producer, Tullow Oil says it has signed a $2.9 billion Sale and Purchase Agreements (SPAs) with China’s state-owned oil company, China National Offshore Oil Corporation (CNOOC) and French oil company Total in respect of the sale of a one third interest to each party of the interests it holds in Exploration Areas 1, 2 and 3A in Uganda.
Tullow, however adds that it will retain a one third interest.
In a press release issued by Tullow and copied to ghanabusinessnews.com, the company said the agreement was signed Tuesday March 29, 2011 and the terms of the transactions include a total cash consideration of $2.9 billion payable to it.
According to Tullow, with the signing of these SPAs, a key condition of the Memorandum of Understanding (MoU) agreed between the company, the Government of Uganda (GoU) and the Uganda Revenue Authority (URA) on March 15, 2011, has been satisfied.
The next step is for Tullow to make certain tax related payments to the GoU, on receipt of which all relevant consents become final and the other provisions of the MoU become effective, it adds.
Tullow indicates also that under the MoU, Tullow and its new Partners, CNOOC and Total, have been granted new licences over EA-1 and an onshore area of EA-3A and the partnership’s rights to develop the Kingfisher discovery have been confirmed.
“A clear plan for the resolution of tax disputes on the various asset sales has been agreed by the GoU, the URA and Tullow,” it said.
The statement added that Tullow and its Partners will now reactivate the significant programme of exploration and appraisal drilling and progress their development plans for the basin which they will jointly present to the Government of Uganda for approval.
Tullow is the lead producer at Ghana’s largest oil field, the Jubilee oil field.