Tullow to acquire Heritages’s Uganda Assets for $1.35 billion

The government has promised to conclude the review of its purchase of Heritage assets in eight weeks.

“Heritage has received a letter from the Government stating that it supports Heritage’s sale and transfer of the Disposed Assets and that it will conclude its review of the transaction within eight weeks,” a press release from Marketwise, Tullow’s information manager said.

Tullow exercised its right of pre-emption on January 17, 2010 to acquire Heritage’s 50% interest in Blocks 1 and 3A in Uganda for a cash consideration on closing of US$1.35 billion, with deferred consideration of up to US$150 million in cash or an interest in a mutually agreed asset.

Heritage shareholders subsequently approved this disposal at a meeting on January 25, 2010.

Tullow has since then selected French company Total and the China National Offshore Oil Company (CNOOC) to be its partners in developing the Lake Albert oil fields.

Each of the partners will have 33% in each of the exploration blocks.

The company said it had selected these two because of their capital as well as experience in oil production.

It had also promised to have started production of a limited number of barrels by the end of this year to increase with time.

Sources said the firm planned to use some of the oil for Hima Cement industries, replacing furnace oil radiometry used in the process

Experts said the company would have to plan for trucking semi solid crude oil to Kampala and then by train to Mombasa for refining and back to Kampala or for export.

Recently, Tullow officials said they plan to have more exploratory drilling under Lake Albert and also promised to build a gas-powered electricity generator to serve the Hoima area.

Source: busiweek,April 12,2010;

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