Tullow sells $900 million Uganda oil stake to Total

Tullow sells $900 million Uganda oil stake to Total

Oil major Tullow Oil (LSE:TLW) has sold a US$900 million stake in its Ugandan oil development project at Lake Albert to French partner Total.

Located on the border between Uganda and DR Congo, oil was first discovered in the area in 2006 by Tullow and is estimated to contain 1.7 billion barrels of oil, which will produce 230,000 barrels per day upon completion.

However, the independent oil company will relinquish a 22% stake in the project, leaving it with 12%, which will eventually fall to 10% when the Ugandan government exercises its right to a share in the field.

Total will pay $100 million on completion of the project, followed by two further installments of $50 million, and then a $700 payment to fund Tullow’s share. China National Offshore Oil Corporation (CNOOC) also holds a share in the development.

Aidan Heavey, Tullow chief executive said: “Today’s agreement will allow the Lake Albert development to move ahead swiftly, increasing the likelihood of final investment decision in 2017 and first oil by the end of 2020.”