Page 20 - The Nile Explorer Magazine 011

Tullow Oil Plc exists

require massive investments across
countries, as well as financial
communit y, an d re comm en d s Uganda oil project
international
from
support
the
a bold reform agenda that includes
policies that create fiscal space, along
with policies to speed up job creation.
Several countries, including South
Africa, Nigeria, and Ethiopia, have
already begun implementing long-
needed reforms in energy and
telecommunications spurred by the
current crisis, and 25 percent of African
firms have accelerated the use of digital
technology and increased investments in
digital solutions. By mid-September, 46
countries in Sub-Saharan Africa had put
in place 166 social protection measures Oil rig on the shores of Lake Albert, Uganda
—with social assistance representing
84 percent of these measures. Social il company, Total; set to become the last year terminated the planned farm-
protection programs have proven to Obiggest shareholder in Uganda’s oil down. A month later, in September,
be a critical tool to mitigate the social project. This follows the government’s 2019, Total suspended its technical
impact of the pandemic. approval of the sale of Tullow’s 33.33% activities on the East African Crude Oil
stake of its Ugandan assets at US$ 575 Pipeline (EACOP) following the collapse
“As COVID-19 continues to put million (Approx. Shs 2 trillion) to the of Tullow’s proposed sale of its Ugandan
substantial pressure on Western company. interests.
and Central African economies, it is This development means that the According to the agreement, Tullow said
important for policymakers to create French firm’s interest in the Lake Albert it would receive up to US $575 million
the infrastructure necessary for rapid Development Project has increased to from Total with an initial payment of
recovery,” said Ousmane Diagana, 66.66% while the rest is held by the China US $500 million at closing (of the deal)
World Bank Vice President for National Offshore Oil Corporation while US $75 million would be paid
Western and Central Africa. “Strong (CNOOC). when the partners finally take the final
policies create the critical Tullow Oil plc said in a short statement investment decision for the Lake Albert
on Oct.21 that the government together
cornerstone for sustained, inclusive with the Uganda Revenue Authority had Development Project.
recovery and improved resilience to finally “executed a binding tax agreement Under the terms of the deal, Total
shocks.” that reflects the pre-agreed principles on would take over Tullow’s entire existing
33.3334% stake in each of the Lake
“The World Bank Group, one of the tax treatment of the sale of Tullow’s Albert project licenses EA1, EA1A,
the largest sources of funding and Ugandan assets to Total.” EA2 and EA3A and the proposed East
knowledge for developing countries, Tullow will receive US$500 million African Crude Oil Pipeline (EACOP).
is taking broad, fast action to help (Approx. Shs 1.875 trillion) and a The transaction was also subject to the
further US$75 million (Approx. Shs
developing countries strengthen their 281bn) when a Final Investment Chinese oil firm, CNOOC, exercising
pandemic response. We are supporting Decision is taken on the development its pre-emption right to take 50% of the
public health interventions, working project. In addition, Tullow is entitled transaction. However, CNOOC chose
to ensure the flow of critical supplies to receive contingent payments linked not to exercise its right, meaning that the
and equipment, and helping the private to the oil price payable after production transaction went on as planned.
Following CNOOC’s position, Tullow
sector continue to operate and sustain commences. said there are no changes to the
jobs. We will be deploying up to $160 Tullow had originally struck a deal with previously announced transaction or
billion in financial support over 15 Total for a farm-down of its licences timeline and that Tullow expected the
months to help more than 100 countries at US$900 million in 2017. However, transaction to be completed in the
protect the poor and vulnerable, support the transaction later collapsed after the second half of 2020.
government insisted that Tullow pay
businesses, and bolster economic US$167 million before it could transfer The Ugandan government “welcomed
recovery. This includes $50 billion of its assets to Total and CNOOC. the agreement” reached between Total
new IDA resources through grants and Tullow Oil Plc, the parent company of and Tullow, that also confirms Tullow
highly concessional loans”. Tullow Oil Uganda at the end of August Oil exit from Uganda.

20 | The Nile Explorer 011