Bloomberg News

Tullow Closes $2.9 Billion Uganda Sale to Pump First Oil in 2016

February 21, 2012

Feb. 21 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with the most licenses in Africa, completed the $2.9 billion sale of its assets in Uganda to Total SA and Cnooc Ltd. and plans to pump first commercial oil from the fields in 2016.

The deal gives each company a one-third stake in three oil blocks in the Lake Albert Basin, Tullow said today in a statement. The blocks are Exploration Areas 1 and 2 and the block formerly known as Area 3A that includes the Kanywataba and the Kingfisher licenses.

The partners will start pilot output “as soon as possible,” Tullow Exploration Director Angus McCoss said.

“They have been working with us for around a year with the development concepts,” McCoss told reporters today in London. “Now it’s about putting these into operation on the ground.” First commercial oil will be pumped 36 months after the Ugandan government approves the development plans, he said.

Production from the Ugandan fields, which hold an estimated 2.5 billion barrels of oil, will reach more than 200,000 barrels of oil a day. The partners will need to invest about $10 billion to build processing and pipeline infrastructure and drill the fields. The transaction completes a process started in March.

The partners plan to focus on the exploration of Kanywataba and Area 1, west of the Nile, this year, Total said today. “Small-scale oil and gas production for the local power market will commence in 2013 from the Kaiso-Tonya area,” Tullow said.

--Editors: Alex Devine, Randall Hackley

To contact the reporters on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net; Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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