Herbert Smith and Vinson & Elkins advised on the recent sale by London-based Tullow Oil of stakes in three oil exploration projects in Uganda to China National Offshore Oil Corporation (CNOOC).
CNOOC signed sale and purchase agreements to acquire a one-third stake in each of three exploration areas, in the Lake Albert Rift Basin, for almost US$1.5 billion. A further third was sold to Total of France, while Tullow retains the remaining third. The three co-owners will coordinate their development plans across all three areas. Operating rights will be determined separately by the Ugandan government.
The sale was delayed by a dispute between Tullow and the Ugandan government over the taxation of capital gains arising from the company’s acquisition last year of rights in the country from Heritage Oil. Closing of the deal remains subject to approval by Ugandan and Chinese authorities, but is expected in the next two months.
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Herbert Smith advised CNOOC, a longstanding client, on the transaction. The Herbert Smith team was led by Anna Howell, head of Asia energy, together with partners David Clinch and Rebecca Major, and senior associate Hilary Lau.
Vinson & Elkins advised Tullow. The team was led by energy transactions partner Alexander Msimang, with assistance from associate Kevin Atkins. Tullow’s general counsel, Graham Martin, is a former partner at the firm.
Total’s general counsel, Peter Herbel, is understood to have handled the deal in-house. CNOOC’s chief legal officer is Zhao Liguo.
Production of oil in the Lake Albert Rift Basin is expected to turn Uganda into a major oil producer.
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