(Alliance News) - Tullow Oil PLC on Thursday said that China's state-owned energy firm has decided not to exercise its pre-emption rights to acquire a set of assets in Uganda.
The London-listed oil and gas explorer explained that CNOOC Uganda Ltd, part of China National Offshore Oil Corp, had pre-emption rights to 50% of assets which Tullow had recently struck a deal to offload to oil major Total SA.
"CNOOC has now informed Tullow and Total that it has elected not to exercise its pre-emption rights. Accordingly, there are no changes to the previously announced transaction or timeline and Tullow continues to expect the transaction to complete in the second half of 2020," Tullow added.
Tullow announced the deal with France's Total back in April. It said it expects to secure a cash payment of USD500 million on deal completion and USD75 million at the final investment decision.
Contingent payments linked to the oil price will be paid after production commences, Tullow noted.
Under the deal, Tullow said it will transfer its entire interests in blocks 1, 1A, 2 and 3A in Uganda and the proposed East African Crude oil pipeline system to Total subsidiary Total E&P Uganda BV.
Tullow shares were 0.6% lower at 24.29 pence each in London on Thursday morning. Over in Paris, Total shares were 0.3% higher at EUR34.14 each.
By Eric Cunha; ericcunha@alliancenews.com
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Tullow Oil (TLW)