Tullow step closer to buying out Heritage shares

TULLOW Oil has moved a step closer to buying out its operational partner Heritage Oil’s shares of two blocks at the Kasamene oil and gas field in Uganda.

Heritage shareholders yesterday voted overwhelmingly in favour of such a deal going ahead at an extraordinary general meeting held in Jersey.

In essence, Heritage’s shareholders were voting on their company simply selling out of the two blocks and not on their preferred buyer – as Tullow’s $1.5 billion (€1bn) bid simply matches that of the earlier one lodged last November by Italian energy giant Eni.

The fact that Tullow has 100% ownership of Block 2 of the field and a 50% share of Blocks 1 and 3 – the assets under review – gave it the rights to match Eni’s earlier bid; something which Tullow announced it would do last week.

A conclusion to the deal hinges on a final decision by the Ugandan government, which must now basically pick between the Italian firm and the Irish-founded exploration company, whose main assets are located in Uganda and Ghana.

While it remains unclear as to how long it will take the government to reach a decision, it did move last week to clarify that both options are on the table and it is not favouring one over the other.