Tullow Oil Says Keen to Expand in East Africa

Source: Reuters 3/23/2010, Location: Africa

Encouraged by an oil find in western Uganda, London-based petroleum explorer Tullow Oil is keen to expand exploration in other parts of east Africa, a senior company official said.

The firm was the first to strike oil in Uganda in early 2006. It is in the process of acquiring Heritage Oil's 50 percent equity in their jointly owned exploration blocks 1 and 3A. It wholly owns block 2.

"I can't be specific but what I can confirm is that we're currently looking at a range of opportunities in East Africa," Brian Glover, Tullow Oil Uganda country manager, said.

He said he could not confirm reports about the company's forays into Kenya.

A regional paper, The East African, reported on Monday Tullow Oil was involved in a turf battle with a Canadian company, Centric Energy, over Kenya's exploration block 10BB.

The paper said Tullow had written to Kenyan Prime Minister Raila Odinga protesting the energy ministry's awarding of the block to Centric Energy while the ministry was still negotiating with Tullow over the same block.

"We can't comment on some of these things at the moment but we would expect that any exploration blocks we're interested in would be awarded on a transparent basis," Glover said.

Foreign interest in east Africa's hydrocarbon potential has surged since Uganda struck commercial deposits.

Recently Italy's petroleum major, Eni SpA withdrew its intention to purchase Heritage Oil's assets, handing victory to Tullow Oil, which had preemption rights on the matter.

The Ugandan government has in turn forced Tullow Oil to enter into partnerships with France's Total and China's CNOOC.

The government is expected to endorse those partnerships by April.

Kenya has 36 blocks in four basins - Anza, Mandera, Tertiary Rift and Lamu. A total 31 wells have been drilled, and 19 of those have shown hydrocarbons.

Tullow has said it intends to start commercial production in Uganda this year on a limited scale and gradually increase daily output to 150,000 barrels by 2015.


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