Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Tullow Oil Nears Record on Uganda Production-Sharing Deals

Feb. 3 (Bloomberg) -- Tullow Oil Plc approached a record in London trading after signing production-sharing agreements with Uganda, paving the way for the U.K. oil explorer to secure partnerships with Total SA and Cnooc Ltd.

Tullow has been awaiting government approval after agreeing in March to sell one-third stakes in its Ugandan finds to Total and Cnooc for $2.9 billion. Today’s accords, which include the Kingfisher field production license, mark “a vital step” in advancing the project in the Lake Albert basin, Chief Executive Officer Aidan Heavey said in a statement.

The shares rose 1.5 percent to close at 1,462 pence, 31 pence short of the peak on March 7.

“We can now move forward in closing the farmdown” agreement, George Cazenove, a London-based spokesman at Tullow, said by phone. Chief Financial Officer Ian Springett on Jan. 18 indicated that the deal could have been completed last month.

“The agreement removes the major barrier to completing” the transaction, Oswald Clint, an analyst at Sanford C. Bernstein & Co. in London, wrote in an e-mailed report. “There is also a stabilization clause in this morning’s agreement, which protects Tullow’s investment in the country (e.g. against tax increases) and was agreed upon by all parties.”

The Ugandan government has been delaying the partnership approval since at least October over contractual disagreements and an oil industry corruption investigation. The partners may invest about $10 billion to produce more than 200,000 barrels of oil a day as soon as 2015.

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.