After completing its agreement with French oil and gas company, Total, over the transfer of its entire interests in Blocks 1, 1A, 2 and 3A in Uganda, and the proposed East African crude oil pipeline, Tullow has reportedly written to the Ministry of Energy and Mineral Development on June 4 to expedite the necessary approvals.

After the Ugandan government approves, the company will receive $500 million in the second half of this year and use the proceeds to pay off its debt. It is expected that Tullow will want to quickly seal off the deal, as it is a major step in its debt payment. The company is expected to raise over $1 billion from this and other transactions before the year runs out.

Reports indicate that officials are also working to speed up the approval since the China National Offshore Oil Corporation (CNOOC) opted not to exercise its pre-emptive rights under their joint agreements.

According to reports, an official of the Ministry said, “The request will be processed expeditiously since there is already mutual understanding on the treatment of the transaction between the government and the oil companies.”

Commenting on the situation, the Head of Corporate Affairs and Communications at Tullow Oil Plc, George Cazenove, said, “We hope they will approve the deal so that it can close in the second half of 2020.”

The agreement between Total and Tullow on a sale and purchase deal had been reported earlier, with insights given on why a similar deal that was supposed to happen in 2017 fell apart and what had changed since then.

Tullow Uganda and Total Uganda also intend to sign a binding tax agreement with the Government of Uganda and the Uganda Revenue Authority (URA) to avoid a repetition of the failed deal and to enable the completion of the transaction. Both companies also have certain Sales Purchase Agreement (SPA) termination rights if the signed tax agreement is challenged, revoked, or under threat of being revoked.