CNOOC elects not to pre-empt sale of assets in Uganda

Tullow has announced that it had agreed the sale of its assets in Uganda to Total and that CNOOC had rights of pre-emption to acquire 50% of these assets on the same terms and conditions as Total. The company says CNOOC has now informed it and JV partner Total that it has elected not to exercise its pre-emption rights with the partners expecting the transaction to complete in the second half of 2020.

The transaction remains subject to a number of conditions, including approval by Tullow’s shareholders, customary government and other 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 adds will now look to progress the tax agreement following CNOOC’s decision not to pre-empt.

CNNOC had following the 21.57% farm-down  of its 33.33% interests in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total E&P Uganda B.V. (Total) notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and CNOOC.

CNOOC was to acquire 50% of the interests to be transferred to Total on the same terms and conditions that were agreed between Tullow and Total (including as to the amount, structure and timing of the consideration payable to Tullow).