Tullow moves on €1bn buyout deal
Tullow Oil is to buy out its partner Heritage Oil's 50pc stake in two huge Ugandan Oil fields in a €1bn deal.
The Aidan Heavey-led oil and gas explorer yesterday said it would exercise its 'pre-emption to scupper an agreement' rights against Heritage selling its holding in the oil fields to Italian energy giant Eni.
It is believed that Tullow had been keen to acquire total control of the assets and bring in partners to develop the fields.
It is estimated that the cost of building a refinery and a pipeline to the coast could run into the billions.
Both groups are equal partners in Blocks 1 and 3A in Uganda's Lake Albert. Oil companies are competing for new reserves in Africa to make up for dwindling resources and restricted access in other parts of the world.
Under the terms of their agreement, Tullow had the right to match any offer Heritage received for the assets by another party. It had a deadline of yesterday to pre-empt Eni's purchase.
Tullow, which operates in 15 African states, plans to produce 5,000 to 10,000 barrels a day in Uganda by 2012, and 150,000 barrels a day within five years.
Mr Heavey said yesterday that Tullow's move to take up its pre-emption rights "is an excellent opportunity to deliver an accelerated basin-wide development plan best suited to government needs and to optimise value for all stakeholders".
He added: "Tullow is committed to retaining a material stake in Uganda and to continue to invest for the long term."
About 1.5 billion barrels are still to be discovered in the Lake Albert Rift Basin, according to Tullow's estimates.