Herbert Smith and Vinson & Elkins advised on the recent sale by London-based Tullow Oil of stakes in three oil exploration projects in Uganda to China National Offshore Oil Corporation (CNOOC).
CNOOC signed sale and purchase agreements to acquire a one-third stake in each of three exploration areas, in the Lake Albert Rift Basin, for almost US$1.5 billion. A further third was sold to Total of France, while Tullow retains the remaining third. The three co-owners will coordinate their development plans across all three areas. Operating rights will be determined separately by the Ugandan government.
The sale was delayed by a dispute between Tullow and the Ugandan government over the taxation of capital gains arising from the company’s acquisition last year of rights in the country from Heritage Oil. Closing of the deal remains subject to approval by Ugandan and Chinese authorities, but is expected in the next two months.
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