Tullow Oil shareholders to vote on Uganda deal

Company agreed to sell stake in joint onshore oil fields to Total for $575m

Tullow Oil: The sale is part of Tullow’s target to raise $1 billion this year to tackle its $2.8 billion debt pile. Photograph: Baz Ratner

Tullow Oil: The sale is part of Tullow’s target to raise $1 billion this year to tackle its $2.8 billion debt pile. Photograph: Baz Ratner

 

Tullow Oil has issued a circular to shareholders about the proposed sale of its stake in a Uganda project to Total for $575 million (€512 million).

The company said in April it had agreed a deal with Total to sell its stake in their joint onshore oil fields in the region. CNOOC had rights of pre-emption to acquire 50 per cent of these assets under the same terms and conditions as Total, but last month said it would not exercise those rights.

That cleared the way for the sale to Total to proceed, but it required approval by regulatory authorities and needed the backing of shareholders. Tullow said it was publishing the circular after receiving approval from the Financial Conduct Authority.

Pandemic restrictions

The general meeting will be held at Tullow’s London offices at noon on July 15th to consider and approve the transaction. However, coronavirus pandemic restrictions mean shareholders will need to vote in advance by proxy through the chair of the general meeting.

Tullow’s board is unanimously backing the deal. The company expects the transaction to complete in the second half of 2020.

The sale is part of Tullow’s target to raise $1 billion this year to tackle its $2.8 billion debt pile.

The execution of a tax agreement with the government of Uganda is also required. The tax issue had delayed the sale of a smaller stake in the project to Total for months.