UPDATE: Tullow: Will Sell Half Uganda Oil Blocks To Other Cos

Tullow Oil PLC (TLW.LN) plans to sell half of the oil blocks it owns in Uganda to one or two major oil companies that would help in the development of infrastructure in the region, the company's Chief Executive Aidan Heavey said Monday.

Tullow will hold 100% of the three oil blocks in Uganda's Lake Albert region after acquiring Heritage Oil PLC's (HOIL.LN) half-share in blocks 1 and 3A. Heritage had agreed to sell those assets to Eni SpA (E), but Tullow exercised its right to pre-empt that sale Sunday.

Tullow's pre-emption will be successful if Uganda's government approves the deal and no other companies make a higher bid before Jan. 25.

Paul Mubiru, the acting permanent secretary of Uganda's Ministry of Energy and Minerals said in a telephone interview that the government is still waiting for an official communication from Tullow Oil over its decision to pre-empt and has not yet decided whether to approve the deal. The government is likely to reach a final decision on the matter within a few weeks, he said.

Heavey told Dow Jones Newswires Sunday that Tullow is acting with the full blessing of the government and he was confident it would approve the pre-emption.

Tullow intends to submit a development plan, including a shortlist of potential partners, to the Ugandan government shortly and hopes to have it approved by the first week of February, Heavey said.

Tullow would ideally like to bring one or two major oil companies with experience of constructing the long pipeline and refinery that the development will entail into its Ugandan assets, he said.

Company Web site: www.tullowoil.com

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com (Nicholas Bariyo in Kampala contributed to this article.)

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