Tullow agrees to buy Ugandan assets from Heritage
Tullow Oil said it signed an agreement to buy Heritage Oil’s assets in Uganda for up to $1.5bn, in an attempt to block a rival offer by Eni SpA.
The deal is subject to approval by the government of Uganda, Tullow said in a statement today.
Heritage shareholders voted yesterday to sell the company’s 50pc share in Blocks 1 and 3A in the Lake Albert Rift Basin. Tullow already owns the other half of the blocks.
Last week, Tullow exercised its right of first refusal over the blocks. The Ugandan government said in a statement yesterday that it will reach a decision in the coming weeks on the “ current process of pre-emption that will respect the contractual rights of the existing companies.”
In addition to the sale agreement with Heritage, “Tullow has been running a transparent farmout process which has attracted interest from major international and national oil companies,” today’s statement said. “Tullow is currently discussing preferred partners with the government.”
International energy producers are competing for assets in Africa as traditional fields go into decline and after nations from Venezuela to Russia curbed access to their resources.
About 1.5 billion barrels of oil are still to be discovered in the Lake Albert Rift Basin, according to Tullow estimates. More than 700 million barrels have already been found.
Tullow, which operates in 15 African states, plans to produce at least 5,000 barrels a day in Uganda in 2012, with output rising to 150,000 barrels a day within five years.