Eni to sue Tullow over leaked cable

By Ibrahim Kasita

ITALIAN energy giant, Eni spa, has drawn battle lines against a UK-based oil firm, Tullow plc, over oil remarks which the later called “lies, libellous and detrimental.”

In a leaked US diplomatic cable last week, Tim O’Hanlon Tullow’s vice president for Africa, alleged that the Italians bribed two cabinet ministers in the battle to own Ugandan huge oil and gas fields.

O’Hanlon allegedly made the accusations at a December 14, 2009 meeting with the US Ambassador to Uganda Jerry Lanier.

The two ministers named are Amama Mbabazi (minister of security) and Hilary Onek (minister of energy and mineral development).

However, Eni has denied the “serious allegations” which it said, “are completely without foundation and has instructed its lawyers to initiate legal proceedings to compensate for any damage caused.”

“It (allegation) is highly libellous and detrimental to the President Yoweri Museveni (and) his ministers at time of general elections,” Paolo Scaroni, the Eni’s boss, said in a statement over the weekend.

“Eni intends to pursue tough measures, legal and otherwise, to ensure these allegations are proven to be what they are – a cynical use of lies to enhance one’s own company’s (Tullow) interest with little to no respect to integrity and ethical conduct of business for which Eni is proud of.”

But Tullow has denied making the defamatory.

“At no time did I give any credence to these rumours and would therefore dispute the record of our conversation as detailed by WikiLeaks,” O’Hanlon explained in a counter statement on Saturday.

“As part of a general discussion about doing business in Africa with the US ambassador to Uganda, I made reference to a number of rumours then in circulation in the local media in Kampala to illustrate the issues the oil and gas industry faced.

“I am appalled and deeply embarrassed that a private conversation has been misreported in this way and have assured both the President and the ministers concerned that the statements attributed to me are untrue and that Tullow fully supports any effort by these ministers to clear their name.

“Finally, Tullow will also be taking steps to similarly assure Eni and Heritage that we are certain that the allegations attributed to me are false,” O’Hanlon’s statement elaborated.

The allegations come at a time when Tullow is battling with Ugandan authorities over $404m capital gains tax.

The row started when Heritage announced the sale of its interests in blocks 1 and 3A in the Lake Albert basin. It first entered into a $1.5b agreement with Italian giant Eni.

However, Tullow pre-empted the deal.

Eni withdrew from the transaction.

But for the deal to be approved, Heritage had to pay the $404m in taxes.

However, Tullow went ahead to pay Heritage all the amounts behind the Governments back.

This annoyed the Government and in response repossessed an oil field in Block 3A, saying its licence had expired. Onek has branded the allegation as “false and defamatory.”

The minister said he would sue for damages.

Scaroni reiterated his company’s commitment to engage in exploiting Uganda’s nascent oil and gas “for the betterment of its people.”