Canada’s Heritage Oil has said the sale of its Ugandan assets to UK-based Tullow Oil – they each own 50% of two fields and Tullow owns a third outright – will be approved imminently.
Landlocked Uganda has become the latest scramble in Africa for oil reserves; although it was first struck six years ago, the largest find happened last year when a 9000-square-kilometre oil field – the largest onshore discovery found in sub-Saharan Africa in more than two decades – was discovered on the Ugandan side of the Lake Albert Rift Basin, which could place the country in the same league of large oil producers such as Equatorial Guinea and Chad.
Even though the reserves are far from the 36 billion barrels that Nigeria holds (estimates put Uganda’s total at about 2 billion barrels), the discovery could be an FDI boon for the country’s agricultural-based economy.
At the time of discovery last year, Heritage CFO Paul Atherton stated that the basin was full of oil. “It’s a world-class find, the most exciting new basin in Africa in decades,” he told The Times newspaper in the UK. Currently, the country pumps 27,000 barrels a day and full-time production is expected to begin in 2011 once a planned 1300km pipeline – expected to be an estimated £1bn investment – is constructed, which will take the oil via Kampala to an Indian Ocean port in Kenya or Tanzania.
According to the Financial Times, Tullow’s plan is to buy the assets of Heritage, sell them off to several large highly skilled companies that would accelerate the development of the fields and boost their value. According to fDi Markets, since 2003, $2.7bn has been invested in the oil and gas industry in Uganda, with $950m coming in last year alone.