ENI, the Italian firm that showed interest in Uganda’s oil fields, has withdrawn its bid after Tullow exercised its right of first option. Two oil fields, blocks 1 and 3A in western Uganda, are owned by Heritage and Tullow in a 50-50% joint venture.
The firm’s spokesperson was quoted in the media on Friday as saying: “Eni today revoked the sale and purchase agreement for the acquisition of Heritage’s 50% interest in blocks 1 and 3A in Uganda, for which Tullow has recently exercised its pre-emption right.”
Tullow is selling part of its own stake to allow for the entry of bigger oil companies that have the capacity and experience to build a refinery and pipeline.
The company of Irish origin last week announced it preferred working with the Chinese state-owned oil company CNOOC or France's Total.
Meanwhile, CNOOC said it is paying $2.5b for a stake in Tullow’s Ugandan oil assets. According to Hong Kong media, the purchase was expected to be signed in London last Friday.
“We are still receiving all proposals from the licensed companies (Tullow and Heritage) to sell part of their stakes and it is a normal process,” Ernest Rubondo, the commissioner in the petroleum and exploration department, said yesterday.
Rubondo did not want to comment on Eni’s withdrawal. He, however, said Heritage was determined to sell its interest and he was convinced they would get a buyer because “many companies are interested in Uganda’s oil”.
“Once we have scrutinised all the proposals and found the best company with Ugandan interests at heart, we shall inform the public.”
Meanwhile, President Yoweri Museveni over the weekend met Russian-based oil company Lukoil and encouraged the firm to invest in Uganda’s oil exploration and refining sector.
Andrei Sapozhnikov, the Lukoil vice-president for business development, handed over his company’s investment proposal to the President, according to a statement from State House.
“Sapozhnikov expressed interest in the oil exploration, refinery and the training of local manpower to facilitate the development of the sector,” said the statement.
Lukoil, according to the firm’s website, is Russia’s largest oil company and the second largest private oil company worldwide by proven hydrocarbon reserves.
The company has about 1.1% of global oil reserves and 2.3% of global oil production. Lukoil dominates the Russian energy sector, with 18% of Russian oil production and 19% of oil refining.
Most of its exploration and production activity is located in Russia, and its main resource base is in Western Siberia.
However, it is also carrying out projects in Kazakhstan, Egypt, Azerbaijan, Uzbekistan, Saudi Arabia, Colombia, Venezuela, Cote d’Ivoire, Ghana and Iraq.
Its petroleum products are sold in Russia, eastern and western Europe, and the US.
Present at the meeting with the Lukoil delegation was state minister for investment Aston Kajara, the boss of the Uganda Investment Authority, Maggie Kigozi, Uganda’s ambassador to Russia, Moses Ebuk, and the Russian ambassador to Uganda.
