France's Total has agreed a long-awaited deal with the UK's Tullow Oil to take a 33% stake in Tullow's oil assets in Uganda, a source close to the deal said Monday.
"Total has reached an agreement with Tullow -- it's done," the source said.
Tullow and Total both declined official comment.
The long-delayed farm-down by Tullow of two thirds of its Ugandan oil assets -- the other third will go to China's CNOOC leaving the UK company also with one third -- was given a major boost earlier in February when Tullow signed two key production sharing agreements with the government of Uganda.
Tullow said then it expected to complete the sale of the stakes to Total and CNOOC shortly after.
Tullow last year announced plans to sell to Total and CNOOC two thirds of its shares in the oil blocks for a total $2.9 billion.
The venture was, however, delayed by a protracted tax dispute been London-listed Heritage Oil and the Ugandan government over capital gains tax on an earlier deal with Tullow for the same stakes.
Uganda has discovered an estimated 2.5 billion barrels of oil, and the ministry of energy expects the discoveries to hit 6 billion barrels when the whole acreage of the Lake Albert Rift Basin is fully explored.
Export pipeline, refinery
Another issue that held up the finalization of the project was whether the oil produced from the Lake Albert Rift Basin would be used predominantly for domestic use or for export.
The Ugandan government earlier this month said Tullow had agreed to the government's demands that an oil refinery and a pipeline to export crude will be built as more reserves are discovered in the country.
Total CEO Christophe de Margerie, speaking to reporters in London, said Monday the export pipeline was critical to the project.
"Without the pipe, there is no project," he said. Total in December said it had entered discussions with Uganda's government over construction of a pipeline to transport Ugandan oil to the Kenyan coast for export.
Uganda, meanwhile, has said it wants the partners to help develop a refinery to start up in 2014 with a capacity of 20,000 b/d that would scale up to 60,000 b/d by 2016 and up to 150,000 b/d around 2018..
