Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Nov. 24 -- Heritage Oil PLC has agreed to sell its Ugandan interests—a 50% working stake in Blocks 1 and 3A, which cover the northern and southern end of Lake Albert—to Italy's Eni SPA for as much as $1.5 billion.
"Following a strategic review, we have decided to enter into this letter of intent with Eni as we recognize the very large multibillion dollar investment that is required to develop the Albert basin and the related infrastructure," said Heritage Chief Executive Officer Tony Buckingham.
Heritage said Eni will pay $1.35 billion up front, along with a further consideration of either $150 million in cash or a stake in a producing oil field of a similar value within 2 years. Heritage estimated that the sale would be completed in first quarter 2010.
Eni said the blocks in the Lake Albert basin have resources for more than 1 billion boe and that 700 million bbl have already been discovered.
As a result of the agreement with Heritage, Eni Chief Executive Officer Paolo Scaroni said his firm is no longer looking into a possible entry in Tullow Oil PLC's Uganda acreage.
“We are not going ahead with the data room” of Tullow's Uganda assets, said Scaroni who last month said the Italian firm had entered Tullow's data room to potentially invest in the company's Lake Albert oil asset.
Scaroni said the first production from the Ugandan blocks Eni is acquiring from Heritage will be in 2014, and he forecast production of more than 50,000 b/d from 2016-17.
Contact Eric Watkins at [email protected].
Photo from Equinor | Stuart Conway.
