Uganda Gives Tullow Conditional Approval To Farm Out Stakes

Uganda’s energy minister Irene Muloni Uganda’s energy minister Irene Muloni

Uganda’s energy minister said on Thursday she had given Tullow Oil conditional approval to sell part of its stake in Ugandan oilfields to France’s Total and China’s CNOOC but only after $167 million of tax on the deal is paid.

London-listed Tullow agreed early last year to sell Total most of its stake in Ugandan fields for $900 million but CNOOC later exercised its pre-emption rights to buy half of the Tullow assets on sale.

“I gave conditional consent for this transaction, subject to payment of tax obligations, as assessed by the Uganda Revenue Authority of about $167 million,” Energy Minister Irene Muloni told a news conference.

The three firms currently each hold a 33.3 percent stake in the fields and Tullow is now selling 21.5 percent of its stake, which will be split equally between Total and CNOOC.

Tullow spokesman George Cazenove said in an emailed statement Tullow believed it should not have to pay the assessed Ugandan tax.

“As Tullow has stated on a number of occasions, we believe that this deal should not attract substantial tax liabilities and that this position is supported by Uganda’s tax laws,” he said.

“Tullow and its partners remain in discussions with the Government of Uganda on this matter and the deal will only complete when those negotiations are brought to a satisfactory conclusion.”

SOURCE: Reuters

Leave a comment

Make sure you enter the (*) required information where indicated. HTML code is not allowed.

Kampala