THE UGANDAN government has given Irish explorer Tullow a conditional green light to go ahead with its $1.5 billion (€1.19 billion) takeover of partner Heritage Oil’s interests in the African state.
Tullow has an interest in three blocks in the Lake Albert Basin in the African country’s rift valley. These are expected to produce up to 200,000 barrels per day within the next four to five years.
Earlier this year, Tullow agreed to buy Channel Islands-based operator, Heritage, out of its share of blocks one and 3A in the Lake Albert licences for $1.35 billion (€1.1 billion), subject to approval from the Ugandan government.
Tullow’s country manager, Brian Glover, said yesterday that the deal had been “approved conditionally” on the basis that Heritage pays taxes related to the transaction to the government.
Heritage and the Ugandan authorities have been in dispute over the company’s tax liability. The row has held up the deal, which was originally due to go ahead at some stage in the first quarter of the year.
Tullow has since agreed to bring in French giant, Total, and China National Offshore Oil Corp (CNOOC) to develop the Uganda project. The three will have equal shares in the blocks. The new partners will focus on producing oil and bringing it to the market. “This will result in a unified partnership to accelerate development of the basin and turn Uganda into a significant oil producing nation,” Tullow said in a statement.
The company’s price rose by more than 4 per cent in London yesterday to £10.83 sterling (€13) on the back of the news.
Tullow is one of the biggest players in oil exploration in Africa. The company is on schedule to begin production from its fields in Ghana in November or December this year. A specially designed floating production, storage and offloading (FPSO) vessel and the equipment needed for the work are already in place.
Over the second half of the year, Tullow is planning to drill 15 high-impact exploration wells in Ghana and Uganda.
Over the next nine months it is planning seven other exploration wells in Sierra Leone, Liberia, Mauritania, Guyana and French Guiana.
Capital spending for the first six months of the year reached $600 million and is forecast to hit $1.5 billion for the year as a whole. Net debt at the end of June was $200 million. Tullow is changing the currency in which it reports to dollars from sterling.
Chief executive Aidan Heavey said in a statement yesterday that the first half of 2010 had been good for the company.
