An oil rig in Uganda.

Tullow Oil PLC (TLW.LN), the oil and gas exploration and production group, Tuesday announced that it has completed the farm-down of 66.6666% of its Ugandan licenses to CNOOC Limited (CEO) and Total (FP.FR) for a consideration of $2.9 billion.

-The farm-down follows the recent signing of Production Sharing Agreements, or PSAs, and the Kingfisher production license with the Government of Uganda.

-Tullow, CNOOC Limited and Total have been working closely since March 2011 on development options for the Lake Albert Basin and will be discussing them with the Government of Uganda later this year.

-It is currently expected that small-scale oil and gas production for the local power market will commence in 2013 from the Kaiso-Tonya area.

-Major production from the Lake Albert Basin is anticipated to commence approximately 36 months after a basin-wide plan of development is approved by the Government of Uganda.

-Based on this timetable, ramp-up to major production would commence in 2016.

-In accordance with the Government of Uganda farm-down consents, operatorship responsibilities within the basin will be divided between the Partners.

-Partners are now re-commencing drilling activities in the area to undertake a wide-ranging exploration and appraisal program in 2012.

-Immediate exploration priorities include drilling the Kanywataba prospect, a series of prospects west of the Nile starting with the Omuka well in EA-1 and further appraisal work in both EA-1 and EA-2.

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