Uganda Why the government is dragging its feet to approve deal between Tullow and Cnooc-Total

摘要

The sale of 21.57% of Tullow Oil’s 33% stake to Total/Cnooc on all of the Lake Albert blocks will not be finalised for several months yet. According to our sources, the Uganda Revenue Authority (URA) is taking its time before it will approve the transaction and is not likely to give its consent before September. It has reason to be cautious. The two latest asset sales made in Uganda’s oil sector, one between Heritage Oil and Tullow Oil, and another between Tullow and Total/ Cnooc, led on to lengthy and costly legal disputes to determine how much capital gains tax should be paid on the sale. The URA’s slow-paced handling of the case shouldn’t however, impact developments on the permits. The three companies had not planned on making their final investment decision before December. Although Total first placed an option to buy the 21.57% stake sold by Tullow Oil, Chinese group Cnooc subsequently chose to use its right of first refusal. The two companies then agreed to share Tullow’s interests.