more from the neighbours

Interesting development from the Tullow/ Heritage partnership. Tullow may bid for Heritages stake. If TRP/ GBP strike, there are going to be a lot of bidders for their block!

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6973946.ece

ULLOW OIL is preparing to scupper a deal that would see half its prized oilfields in Uganda sold to Eni, the Italian energy giant.

The FTSE 100 oil explorer shares ownership of two big blocks in a remote part of Uganda with rival Heritage Oil. The companies recently discovered that the fields hold huge reserves but to bring them into production will require billions of dollars in investment.

Heritage, which is much smaller than Tullow, decided instead to sell its stakes, striking the $1.5 billion (900m) deal with Eni in November. Under the partnership agreement, Tullow has the right to match any offer and has until January 17 to do so. Sources said the company is lining up the finance to exercise its option.

Ownership of the fields is an issue of national concern in Uganda. The finds will form the foundation of a new industry and the government has been closely involved in development plans. For Tullow it signifies a risky new phase because its success so far has revolved round discovering new basins, not developing them.

Buying Heritages stakes would give Tullow greater control over its own destiny. In addition to the two blocks, it has a 100% stake in an adjacent third parcel. If it owned all three outright, it could then sell them together to a partner of its choosing. Any change of ownership must get government approval.

Development plans, including the construction of a 1,300-kilometre pipeline to the coast and a refinery, require cash and expertise that Tullow doesnt have. There is no shortage of suitors.

Before the Heritage-Eni deal, it had launched its own auction to divest part of its holdings. Total of France, Norways Statoil, China National Petroleum Corporation, Sinopec and Korea National Oil Corporation are all understood to have expressed interest.

Tullow declined to comment.