Uganda Says New Tullow Farm-Out Deal Must Fulfill Tax Obligations
August 30 2019 - 2:53AM
Dow Jones News
By Nicholas Bariyo
KAMPALA Uganda--Tullow Oil PLC (TLW.LN)'s new sales process to
reduce its stake in Uganda's Lake Albert oil project must fulfill
the country's tax obligations, Uganda's energy and minerals
ministry said Friday.
The UK-based energy company said Thursday that its plans to sell
a stake in its project in Uganda, which produces 230,000 barrels of
oil a day, to Total S.A. (FP.FR) and CNOOC Ltd. (0883.HK) has been
called off because it had been unable to reach certain agreements
on taxes with Ugandan authorities. Tullow added that it plans to
begin a new sales process to reduce its 33.33% stake in the
assets.
But Ugandan authorities said tax obligations on the sale must be
complied with, in accordance with Ugandan laws.
Uganda's latest stance could re-establish a standoff that has
stalled the $900 million deal, initiated in 2017.
"We are ... confident that as Tullow moves to re-initiate a new
sales process the joint-venture partners will remain committed to
fulfilling their tax obligations," Robert Kasande, the ministry's
permanent secretary, said in a statement. Mr.Kasande added that the
government would continue working with the joint-venture partners
to ensure the final investment decision on the projects is achieved
at the earliest time, "in a manner that safeguards the country's
interests and sovereignty."
Another standoff could potentially hamper the development of
Uganda's already delayed oil fields, estimated to contain some 6
million barrels of crude.
Write to Nicholas Bariyo at Nicholas.bariyo@wsj.com
(END) Dow Jones Newswires
August 30, 2019 02:38 ET (06:38 GMT)
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