Tullow Oil has completed the sale of its stakes in Blocks 1, 1A, 2 and 3A in Uganda and of the proposed East African Crude Oil Pipeline System to Total for a total consideration of US$575m. Under the term of the deal, Total acquires Tullow’s 33.3% stake in the Lake Albert project licenses EA1, EA1A, EA2 and EA3A and the proposed EACOP System that would stretch over 1,445 km to Tanzania. Total already owns a 33.3% stake in the project, together with China’s CNOOC (33.3%), which will not pre-empt the sale. The transaction was announced in April 2020, approved by Tullow Oil's shareholders in July 20202 and approved by the Ugandan government in October 2020. In addition, an agreement on the tax treatment of the transaction was reached with the Ugandan Revenue Authority.
The Lake Albert field was discovered in 2006 and is expected to reach a production level of around 230,000 bbl/d at its peak. The EACOP project requires a US$3.5bn investment. It was initially announced in September 2017 and the stake sales had been under negotiations since January 2007. Because of disagreements with Ugandan authorities, Total suspended the construction of the pipeline in September 2019. Since 2006, the government of Uganda has also planned to build a 216,000 bbl/d refinery, but the project has been delayed multiple times.