Tullow Oil could hijack Eni's $1.5bn Uganda deal

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The oil explorer Tullow Oil is believed to be mulling over the possibility of hijacking Italian supermajor Eni’s US$1.5 billion deal to buy the rights to two oil blocks in Uganda from Heritage Oil.

Bloomberg reported that Tullow, who are equal partners with Heritage in the two blocks, have a clause in the contract that states it has the right to match any offer Heritage receive for its share.

“We would consider exercising pre-emption rights and, in the event that was successful, we would then go through a farm-out for all the assets,” Brian Glover, Tullow's manager for Uganda told Bloomberg in an interview.

"We see Uganda as one of our key countries for future investment,” he added.

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Heritage decided to sell the blocks at Lake Albert to Eni after deciding that they were too expensive to develop due to the remote location of both fields. It is thought that the company would invest the money in its fields in Iraqi Kurdistan as well as pay a special dividend to shareholders.

Heritage has invested $150 million drilling six wells in Uganda and the company's share of the oil amounts to around 300 million barrels.

Any prospective deal will have to be ratified by the Ugandan government.