(Xinhua) -- British oil company Tullow Oil (GSE:TLW) on Tuesday announced that the sale of its assets in Uganda to Total has completed with the 500 million U.S. dollar consideration received earlier in the day.
Tullow in a statement posted on its website said it is due to receive a further 75 million dollars when a Final Investment Decision is taken on the development project plus contingent payments linked to the oil price payable after production commences.
"The closing of this transaction follows the satisfaction of all deal conditions, announced on October 21, 2020, which included the execution of the binding Tax Agreement, the approval for the transfer of Tullow's interests to Total and the transfer of operatorship for Block 2," the statement said.
Although Tullow will retain a financial link to the development project through the potential contingent payments, the closing of this transaction marks Tullow's exit from its licenses in Uganda after 16 years of operations in the Lake Albert basin, the statement said.
"While we are sad to be exiting Uganda after many years, the 575 million dollars of proceeds form an important part of our plan to strengthen Tullow's balance sheet and improve our financial position," Rahul Dhir, Chief Executive Officer of Tullow Oil Plc said.
Uganda has discovered so far 1.6 billion barrels of oil and commercial production is projected to start in 2023. Enditem
