Energy minister Irene Muloni revealed that government has endorsed the Anglo-Irish Tullow Oil Uganda’s sale of assets to French oil major Total E&P and China’s Cnooc, subject to payment of $167m (about Shs614b) in Capital Gains Tax (CGT).
The CGT is a tax on the profit upon sale or disposal of something such as an asset that has appreciated in value over time. Tullow’s transfer of 21.57 per cent of its assets to Total E&P and Cnooc is worth $900m (about Shs3.4 trillion).
Uganda’s oil belt—the Albertine Graben— is split into three Exploration Areas (EAs); 1,2 and 3. The EA1 is located in Nwoya, EA2 in Buliisa while EA3 is in south Lake Albert in Hoima and Kikuuke districts. Each of the three oil companies owned 33.33 per cent shares in each of the three exploration areas.
The latest deal gives both Total E&P and Cnooc equal shareholding of 37.5 per cent in Uganda’s oil fields while Tullow Oil will remain in a non-operator position with 11 per cent interest as equity. Tullow’s country general manager Jimmy Mugerwa was not readily available for a comment on the matter as he was reported out of the country.
Source: The Monitor