Tuesday 12 December 2017

Tullow poised to take total control of Uganda field

Thomas Molloy

TULLOW Oil moved a step closer to taking control of operations in Uganda, which it part owns, after the Irish-founded explorer's Canadian partner, Heritage Oil, ended a sale and purchase agreement with Italy's Eni.

Yesterday's announcement leaves Tullow with no rival to buy the remaining stake. Any deal must be approved by the Ugandan government and will be followed by a deal with either Chinese oil company Cnooc or France-based Total to develop the infrastructure needed to get the oil from Uganda to the coast.

Shares in Cnooc fell yesterday in Hong Kong trading after reports said the company, which is China's biggest offshore oil producer, may spend as much as $2.5bn (€1.83bn) on a stake in Tullow's Ugandan assets.

A deal of this size would be the largest deal in three years for Cnooc, which already has stakes in several African countries as well as Indonesia and Australia. Jiang Yongzhi, Cnooc's Beijing-based spokesman, said yesterday the company didn't comment on "market rumours".

Any deal with Tullow may include Total as an equal partner in the fields in the country's Lake Albert Basin, local media reports say.

Chinese companies are snapping up mines and oil fields all over Africa as the nominally Communist country attempts to secure the supplies of energy and minerals needed for China's double-digit economic growth.

The company said in November that the Ghanaian government hadn't allowed it to bid for assets held by Kosmos Energy LLC in the African nation. In 2005, Cnooc abandoned an $18.5bn bid to acquire California's Unocal because of US political opposition.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business