TULLOW Oil said yesterday it had completed an acquisition which would help to turn Uganda into a significant oil producing nation.
It has paid £870million to buy 50% interests in blocks 1 and 3a in the Lake Albert Rift Basin from fellow British company Heritage Oil, plus an additional contractual settlement of £64.5million.
The buyer plans to enter agreements with China’s CNOOC and France’s Total to “farm down” two-thirds of its interests in blocks 1, 2 and 3a in the basin.
Chief executive Aidan Heavey said: “This is a major step forward for Tullow and the Ugandan oil industry.
“We now look forward to signing the farm-down agreements with CNOOC and Total in the coming weeks and start work with them on an accelerated basin-wide development plan that is expected to deliver production well in excess of 200,000 barrels of oil per day from the Albert Rift Basin.”
The development is likely to cost about £6.45billion.
Oil prices fell yesterday as negative US economic data including weaker US stocks limited buying interest in crude.
Crude oil settled down $1.48 a barrel to $77.50 in New York, while Brent crude in London shed $1.37 at $76.13