Tullow Oil likely to seek partner in Uganda

EXPLORATION GROUP Tullow Oil is likely to seek a partner to speed up the development of its Ugandan interests when it brings them close to production next year.

The Dublin and London-listed company held a briefing for Irish shareholders in the capital yesterday.

The company believes that its interests in Uganda could deliver up to one billion barrels of oil.

It expects to spend €750 million developing its resources this year, including the Jubilee and Tweneboa fields in Ghana, which have potential reserves of up to three billion barrels of crude oil.

Chief executive Aidan Heavey told the meeting that the company was likely to farm out up to 50 per cent of its holding to a partner in order to bring the fields there to full production.

Mr Heavey said the first phase of production from Uganda, timed for next year, would be around 20,000 barrels a day. The next phase would be more expensive and time-consuming as that would require a pipeline.

“What we are looking at doing is bringing in a partner and the partner will fund the pipeline,” Mr Heavey said.

Afterwards, he explained that exploration companies rarely take 100 per cent of any licence or interest, and generally bring in partners.

However, in the case of Uganda, Tullow decided to keep full ownership there in order to move quickly through the exploration phase.

Mr Heavey said the company was likely to begin the process of finding a suitable partner for the deal next year, when the wells there were nearing production.

Tullow holds three licences on the Ugandan side of the Lake Albert rift basin in Africa.

Much of Tullow’s interests now lie in Africa. Mr Heavey acknowledged yesterday that there was a level of political risk attached to operating there, but said it had well-developed relationships in the countries where it operated.

“We’ve never had a contract changed on us in 20 years,” he told the meeting, and added that Britain, where it also has interests, had recently changed tax laws affecting the industry twice in one year.

Tullow also has licences in Gabon, Ghana and Guinea. In Europe it has a number of gas-producing wells in the North Sea, while it also has interests in Bangladesh and Pakistan.