LONDON (Reuters) - Tullow Oil (LON:TLW) agreed to sell its majority stake in the not-yet-producing fields off the coast of Guyana to its minority partner Eco Atlantic (LON:ECOE) for $700,000 in cash and potential future payments if production starts, the two firms said.
The deal will take Eco's stake in the Orinduik field, in which TotalEnergies (LON:TTEF) owns 25% and where Tullow drilled what it deemed two uncommercial wells in 2019, to 75% and make Eco operator of the project.
Guyana has become a major oil producer in recent years, with Exxon (NYSE:XOM) operating prolific fields in the vicinity of Orinduik.
Tullow in 2020 said it would focus the vast majority of its spending on its existing infrastructure in West Africa, with Ghana at its centre.
Eco said it planned to drill in the so-called cretaceous level of the rock which is the depth at which oil discoveries were made in the adjacent Stabroek Block, operated by Exxon. It added it planned to sell down part of its stake.
If Eco makes a commercial discovery, it will pay Tullow $4 million in addition to a further $10 million if Guyana issues a production licence and royalty payments on future production, the firms said.