is advising on a stake sale with a deal value of US$900 million (about $1.23 billion) of a major oil project in Uganda.
The law firm is advising Tullow Oil plc (Tullow) on its divestment in Uganda to Total E&P Uganda B.V. (Total). Total will acquire 21.57% in the Lake Albert development project in in the country while Tullow retains an 11.76% interest in the upstream and pipeline.
Tullow’s stake will be reduced to 10% when the Government of Uganda formally exercises its right to back-in.
Global energy partner Michael Burns is leading the Ashurst team, working with partners Philip Thomson and Jan Sanders. The partner team is supported by associates Mary Seely, Grace Rackham, Maddison Bird and Emma Camilleri. Tax advice was provided by partner Nick Gardner and associate Tim Gummer.
The deal includes US$200 million in cash (about $272.96 million), consisting of $100 million on completion of the transaction (about $136.48 million) and $50 million at both Final Investment Decision and First Oil (each about $68.24 million).
US$700 million or about $955 million is deferred consideration which will be used by Tullow to fund the company's share of the costs of the upstream development project and the associated export pipeline project.
The project is expected to produce around 230,000 barrels per day at peak oil.
“This is a hugely significant transaction for Tullow, Total and Uganda’s Lake Albert upstream and associated pipeline projects. We are delighted to be advising Tullow and to develop the relationship into the M&A arena," said Burns.
In response, Rupert Rowland-Clark, General Counsel of Tullow, said: “We’ve really appreciated Ashurst’s support on this transaction so far. Their M&A expertise and oil and gas industry knowledge has made a significant difference moving this transaction efficiently to signing. We now look forward to working with Ashurst to get this transaction completed.”
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