Kampala, Uganda | THE INDEPENDENT | Tullow Oil plc (Tullow) shareholders have today approved its sale of the interest in Uganda’s oil industry, removing one of the key hurdles for the transaction to be concluded.
Tullow Oil said in April that it had signed a deal to sell all its stake in the project to France’s Total for a sum of USD 575 million. The company needed a simple majority vote to move ahead with the transaction which will see it entirely exiting Uganda.
Tullow said on Wednesday that 99.9 percent of its shareholders had voted for the transaction that will see all its interests in Uganda’s oil industry be taken over by the French oil giant Total E&P. Tullow will be paid USD 500 million payable at completion and USD 75 million payable after the project’s final investment decision.
The announcement breathed new life into Uganda’s oil and gas sector following a long stalemate that had affected the country’s commercial oil production time. There is a wide agreement that the conclusion of this transaction will open the country’s oil sector, quicken the final investment decision (FDI) that will see companies spend actual money in Uganda.
Tullow says the transaction also remains subject to a number of other conditions including customary government approvals and the execution of a binding tax agreement with the government of Uganda and the Uganda Revenue Authority that reflects the agreed tax principles previously announced.
Tullow says, “The transaction is expected to be completed in the second half of 2020.”