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Last updated: 01 Apr 2012
Tullow has interests in three licences in Uganda in the Lake Albert Rift Basin. The Group gained these licences through the acquisition of Energy Africa in 2004 and the subsequent acquisition of Hardman Resources in 2007.
In 2009, Heritage announced its intention to sell its interests in Uganda and Tullow has used its right of pre-emption to sign a Sale and Purchase Agreement with Heritage to acquire its 50% interests in Blocks 1 and 3A for a total consideration of $1.45bn. In parallel to this, Tullow had been working closely with the Government of Uganda to bring in like-minded partners who have the technical capabilities and resources in place to facilitate an efficient basin-wide development programme to meet the needs of the Government. Tullow proposed to the Government of Uganda a partnership with CNOOC and Total where all three parties would share a one third interest across all three licences. On the 29 March 2011, Tullow and its new partners signed SPAs to this affect for a total gross consideration of $2.9bn having earlier that month agreed the MOU with the Government. The Government signed in February 2012 the new PSAs enabling Tullow to complete the farmdown with the partners.
Lake Albert is located in the north west of Uganda and is part of the Albertine Rift which stretches from the northern end of Lake Albert to the southern end of Lake Tanganyika. It is one of Africa's most important sites for the conservation of biodiversity and has been designated so by Birdlife International, the World Wildlife Fund and Conservation International.
In recognition of the rich environmental, economic and social value of Lake Albert, Tullow is conducted a two-year programme to access the key impacts of its activities in the area. The Group is also undertaking a wide range of 'Working with Communities' initiatives.
In addition, the remoteness of the region creates many challenges. Operationally, access to this land-locked region is either by small aircraft or road, and major supplies are trucked 1,300 kilometres to the site from Kenya. The distance of the acreage from developed world oil markets means that a small refinary and pipeline investment will be required.