The shareholders of Tullow Oil have approved the proposed sale of the company's entire interests in Blocks 1, 1A, 2 and 3A in Uganda and of the proposed East African Crude Oil Pipeline System to Total. In April 2020, Total agreed to buy Tullow’s entire interests in the Lake Albert oil development project in Uganda, including the East African Crude Oil Pipeline (EACOP) for a total consideration of US$575m. Under the term of the deal, Total would acquire 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. An agreement in principle on the tax treatment of the transaction has been reached with the government of Uganda. The transaction remains subject to regulatory and government approvals and is expected to complete in the second half of 2020.
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 and depends on the closure of Total's deal with Tullow Oil and CNOOC. The EACOP project 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.