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Tullow Uganda Expects to Invest $150-$200 m in 2010

Source: Reuters 3/25/2010, Location: Africa

London-based explorer Tullow Oil Plc plans to drill at least 10 wells in Uganda this year and invest around $150-$200 million in exploration and production as interest in the country's oil sector heats up.

Uganda, which has crude reserve estimates of around 2 billion barrels in its Lake Albert region, is increasingly drawing the attention of global oil players.

Tullow is in the process of acquiring Heritage Oil's 50 percent equity in two jointly owned exploration blocs and has applied to the government to sell stakes to the China National Offshore Oil Corporation, CNOOC, and France's Total. "I think our investment will be somewhere between $150 and $200 million. It's difficult to be accurate at this stage," Brian Glover, its Uganda country manager told Reuters of Tullow's exploration and production plans this year.

Speaking on the sidelines of an oil and minerals conference in Kampala, Glover estimated that Tullow invested around $170 million last year.

Tullow will drill a minimum of 10 wells this year and planned to bring in extra rigs, he said.

A top Ugandan energy official said earlier this month that the government expected to deliver its decision on the purchase of Heritage's assets by April.

The decision will end months of talks between Kampala and oil firms as Heritage seeks to exit Uganda, and Tullow looks to acquire sufficient resources to finance the development phase of Uganda's evolving petroleum industry. "There's a willingness by all parties to move swiftly to close this," Glover said.

Earlier this month, Total and CNOOC presented their investment and development plans to Uganda.

Tullow Chief Operating Officer Paul McDade told conference delegates that the next phase of investment would total $5 billion and possibly up to $10 billion, but he did not give a timeframe or details.

A senior Ugandan government official said in February that Uganda would need $8 billion in investment in the next decade to develop its oil sector.

Glover said crude quality in its blocks had an API gravity of 30-31 degrees. "It's a little bit variable While the crude is waxy, it's comparable to a Brent or a Texas Light Sweet 93 percent comparable," he said.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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