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(Alliance News) - Tullow Oil PLC on Wednesday said it has received USD75 million in contingent consideration after a final investment decision for the Tilenga Project in Uganda and the East African Crude Oil Pipeline.
TotalEnergies SE at the start of the month said it and China National Offshore Oil Corp had sealed a landmark USD10 billion deal to develop Uganda's energy resources and build a vast regional oil pipeline.
The French oil and gas company said the Lake Albert Resources Development project encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline in Uganda and Tanzania.
Tullow noted the news, and said this has triggered contingent consideration of USD75 million to the firm following Tullow's sale of its assets in Uganda to Total in 2020.
"Tullow will continue to have exposure to the Tilenga project through additional cash consideration which may be received in the form of contingent payments depending on the average annual Brent price once production commences," said Tullow.
The West Africa-focused oil and gas producer added that the payment underpins free cash flow in 2022, supported by a strong start to the year with a realised average oil price USD86 per barrel in January.
Shares in Tullow were up 3.3% at 50.76 pence in London on Wednesday around midday.
Wednesday's news follows Tullow on Tuesday noting a tribunal has ruled it needs to pay USD76 million to HiTec Vision over arbitration of whether discoveries made in the PL-537 licence, offshore Norway, between 2013 and 2016 had triggered a further payment under the SPA between Tullow and HiTec regarding the purchase of Spring Energy in 2013.
By Lucy Heming; lucyheming@alliancenews.com
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