The Work

April 4, 2011 1:49 PM

Vinson, Herbert Smith Take Lead on $2.9 Billion Tullow Oil Sale

Posted by Brian Baxter

Britain's Tullow Oil announced last week the $2.9 billion sale of stakes in three Ugandan oil exploration projects to French energy giant Total S.A. and the government-owned China National Offshore Oil Corporation (CNOOC).

The cash deal helps move forward a development that will make Uganda a major oil producer, The Wall Street Journal reports. The landlocked African country signed several deals with foreign oil companies in recent years to tap reserves along its western border.

Vinson & Elkins energy transactions partner Alexander Msimang and associate Kevin Atkins in London are advising Tullow on the deal. The London-based company's general counsel, Graham Martin, is a former Vinson partner. Martin is being assisted by in-house counsel Sunil Puri and Alasdair Murray on the sale of a one-third interest in each project to Total and CNOOC.

Beijing-based CNOOC, China's third-largest oil and gas company, turned to longtime outside counsel Herbert Smith for advice on the transaction. Anna Howell, the head of the British firm's Asia energy practice, is advising CNOOC, along with infrastructure and mining partner David Clinch and associates Hilary Lau and Robin Carvell. CNOOC's chief legal officer is Zhao Liguo.

Herbert Smith advised CNOOC on several high-profile matters, such as its liquefied natural gas agreement with BG Group last year and a controversial bid for Unocal in 2005, which was subsequently withdrawn because of U.S. political concerns. (Herbert Smith was one of several firms advising CNOOC on that transaction.)

Total handled the deal in-house through lawyer Andy Powell. The Courbevoie-based oil company's general counsel is Peter Herbel.

The New York Times reports that the asset sale was slowed by a tax dispute between Tullow and the Ugandan government over capital gains from the company's $1.5 billion acquisition of Heritage Oil's rights in the country last year.

Tullow said in a statement that it expects the current deal with CNOOC and Total to close within the next four to six weeks, pending regulatory approval in Uganda and China.

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