Uganda: Termination of the Agreement with Tullow

Paris, August 29, 2019 – On January 9, 2017, TotalEnergies EP Uganda and Tullow entered into a Sale and Purchase Agreement (SPA) whereby TotalEnergies EP Uganda would acquire 21.57% out of Tullow’s 33.33% interest in the Lake Albert licenses. CNOOC exercised its right to pre-empt 50% of the transaction. As a result, TotalEnergies EP Uganda and CNOOC would have each increased their interest to 44.1% while Tullow would have kept 11.8%.

Since 2017, all parties have been actively progressing the SPA. However, despite diligent discussions with the authorities, no agreement on the fiscal treatment of the transaction has been reached. The deadline for closing the transaction has been extended several times, clearly demonstrating the endeavors of the parties to find an agreement. The final deadline will be reached at the end of today, August 29, 2019, and as such, the Acquisition Agreement will be automatically terminated.

“Despite the termination of this agreement, TotalEnergies EP Uganda together with its partners, CNOOC and UNOC, will continue to focus all its efforts on progressing the development of the Lake Albert oil resources. The project is technically mature and we are committed to continuing to work with the Government of Uganda to address the key outstanding issues required to reach an investment decision. A stable and suitable legal and fiscal framework remains a critical requirement for investors”, declared Arnaud Breuillac, President Exploration & Production of TotalEnergies.

TotalEnergies' interest will therefore remain at 33.3% on blocks EA1, EA2 and EA3 prior to the 15% Uganda Nationaal Oil Company back-in, TotalEnergies EP Uganda being operator of the block EA1 which contains the largest part of the reserves. TotalEnergies EP Uganda keeps the right to pre-empt any future transactions, in case any party divests part or all of its interest. 

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