Petroleum Africa
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Friday, December 4, 2009
Following Petroleum Africa’s Wednesday report on the Heritage, ENI, Tullow triangle over the sale of lucrative Ugandan assets, a new development came to light on Thursday. According to wire reports, Brian Glover, the Uganda unit manager of the Irish firm told Dow Jones that it had not yet been contacted by Heritage in regard to the $1.5 billion ENI offer for the 50% Heritage share in Block 1 and Block 3a. Tullow holds the remaining 50% stake in the blocks as well as 100% of Block 2.
Glover also said that Tullow had contacted the Ugandan authorities notifying them that it may exercise its pre-emptive rights as previously reported. "We have informed the government of our intention to consider pre-emption, and thereafter assess how we make a good deal for Uganda by integrating with our farm-down process which has already commenced with a data room," Glover said in an emailed statement according to Dow Jones Newswires.
As Petroleum Africa previously reported, it seems rather unlikely that Tullow could successfully preempt the deal considering it needs funding to develop its own Ugandan assets and would need a pretty significant player behind it to succeed. With the potential revenue the Ugandan government could realize from the Heritage/ENI deal, it "may not" favor a Tullow challenge with its aim to bring production on line as soon as possible; however, if another major were to come knocking at the door…"who’s to say" how it might find?
When asked for an update on the situation, Ernest N.T. Rubondo, Acting Commissioner of the the Ministry’s Petroleum Exploration and Development Departments told Petroleum Africa: "The ENI farm out is still an offer subject to Heritage share holders, partners in the exploration area, and Government’s approval. More information should become available as it progresses."
Tullow was looking for a farm-in partner for its Ugandan assets and had opened a data room. ENI was among the top of the list of potential suitors. It all seemed to be headed toward a Tullow/ENI deal with the Italian company’s CEO visiting Uganda and holding meetings with high-level officials including President Yoweri Museveni back in August. Perhaps the suitor list grew too long for ENI and it decided to take the back door route through the considerably smaller Heritage, or alternately, maybe Heritage pulled a fast one on Tullow. If one likes the conspiracy theory route, maybe the two partners on Block 1 and Block 3A put their heads together in a strategic move to attract another major to farm-in and/or purchase stakes in the Tullow Block 2 as well as the two Heritage blocks.
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