Tullow expects action on Ugandan oil deal

July 6, 2010 at 10:38 AM
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LONDON, July 6 (UPI) -- The Ugandan government is expected to end a corporate dispute that would open the country's vast oil reserves to exploitation, executives said.

Heritage Oil in December agreed to sell its Ugandan assets to Italian energy company Eni, though Tullow Oil had the right to pre-empt the deal. The Uganda government in February said it was in favor of Tullow's plans despite a lobbying campaign by Eni to stop the deal.

Tullow is now working with its partners at French company Total and the China National Offshore Oil Corp. to buy Heritage's assets in the oil-rich Lake Albert region.

The government in Uganda has yet to sanction the deal, however, as it claims Heritage owes $360 million in taxes.

Ian Springett, the financial director for Tullow, told the Financial Times his company expected to hear a decision as early as Tuesday, however.

"Our expectation is that we expect to announce it later today," he told the newspaper. "For this exciting project, it's clearly excellent news."

The Lake Albert region in Uganda holds as much as 1 billion barrels of oil. Tullow announced plans in January to raise more than $1.6 billion to fund its investments in Africa.

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