January 19, 2010 3:37 am

Eni leaves deal up to Uganda

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Eni, Italy’s biggest energy group, yesterday said it would wait for the Ugandan government to decide whether to take its side or that of Tullow Oil in the fight over which company will take Uganda’s oil deposits into commercial production.

Tullow on Sunday exercised its pre-emption rights to scupper, at least for now, a $1.35bn (£826m) deal between Heritage Oil, its partner in Uganda, and Eni. Eni’s agreement to buy all of Heritage’s Ugandan assets would have gone a long way to securing the Italian company’s ambition to become Africa’s most important international oil company.

Eni must now decide whether to counter-bid. It has until Heritage’s shareholder meeting on January 25 to do so. But its statement suggested concession was more likely.

“Eni is waiting to receive indications from the government of Uganda before exercising its right to
terminate the sale and purchase agreement with Heritage.”

Eni still hopes the government will decide in its favour. It has spent months lobbying Kampala. Last week it even enlisted the aid of Franco Frattini, the Italian foreign minister, who travelled to Uganda.

Despite the overture, Ugandan officials are giving little away. A senior government official said: “Of course, the Italian minister saw the president last week so it’s getting to be quite a crowded field, but I think it can be sorted out.”

He added: “The view of the government is that the private sector can sort it out, so long as it doesn’t compromise the national interest.”

But the final say is that of the government, so Eni and Tullow will probably continue their lobbying efforts until the bitter end.

If Tullow were to persuade Uganda it has secured the partnership of an important international oil company, the case would become tougher for Eni.

Related Topics

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments
SHARE THIS QUOTE