UPDATE: Tullow Determined To Preempt Eni Deal, Seeks Deadline Extension
16 Janvier 2010 - 2:09PM
Dow Jones News
U.K.-based Tullow Oil PLC (TLW.LN) is determined to exercise its
preemption rights in the proposed takeover of Heritage Oil PLC's
(HOIL.LN) Ugandan interests by Italy-based Eni Spa (E) and is
seeking to have the Jan. 17 deadline extended to allow it to finish
details in the preemption process, sources said Saturday.
A company source said that Tullow Oil was finalizing details on
the preemption process and is now seeking to have the deadline
extended.
"The Ugandan government is fully aware of the company's
intentions to preempt, what we now want is to have the deadline
extended to allow us complete some details," the source said.
Tullow Oil is joint owners of blocks 1 and 3A with Heritage. The
company wants to preempt the proposed $1.5 billion deal that will
see Eni take a 50% stake in the blocks. Company officials say that
Tullow would have to match the $1.5 billion being offered by Eni to
increase its stake in the blocks to 100%.
A source close to Tullow Oil Uganda operations told Dow Jones
Newswires Saturday that Tullow also wants to amend the preemption
agreement so that it increases its stake only in Block 3A, where
the country's largest well, Kingfisher was first drilled. Heritage
could not comment immediately.
Tullow Oil's proposed takeover of Heritage interests in all of
the two blocks would give it sole ownership of all three blocks
where commercial oil reserves have so far been confirmed. However,
the Ugandan government is uncomfortable in allowing only one
company take over all the blocks.
"We do not want to create a monopoly in our oil sector," a
government official said.
Ernest Rubondo, the head of Uganda's petroleum production and
exploration department, said separately that government would study
the proposals of both Tullow and Eni to determine who to allow take
over Heritage's interests later this month.
Meanwhile, Eni has continued to press for the stake in the
country's oil sector and the Italian foreign affairs minister held
talks with the Ugandan president Friday over the deal, in which he
presented Eni's proposed investment plan in the country's oil
sector, which include building a refinery and a power plant.
Franco Frattini told reporters in Kampala Friday that Italy had
also asked Uganda to identify other areas where Italian companies
can invest.
Frattini was also seeking assurances from the Ugandan president
to ensure that Tullow does not pre-empt the deal, according to a
source from the president's office.
Uganda and Italy also agreed to sign an investment agreement,
and a Ugandan trade show is being organized in Italy in May to
showcase investment opportunities in Uganda.
-By Nicholas Bariyo
<http://www.dowjonesnews.com/newdjn/story.aspx?StoryID=DN20100107008128&Location=I&TakeNo=3#Term1>
, contributing to Dow Jones Newswires; +256 75-262 4615;
bariyonic@yahoo.co.uk
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