Monopoly warning ahead of Tullow vote

UGANDA’S GOVERNMENT yesterday warned that it would not allow monopolies in its energy industry, days before a key shareholder vote on Irish firm Tullow Oil’s planned $1.5 billion (€1.06 billion) deal in the African country.

Exploration group Tullow is bidding to buy its partner Heritage Oil’s 50 per cent stake in two licence areas in Uganda’s Lake Albert basin for $1.5 billion.

If the deal goes through, Tullow will control three blocks in the region with proven resources of 700 million barrels of oil.

Heritage shareholders must vote on the deal next Monday.

Italian giant Eni has also offered $1.5 billion for the company’s Ugandan interests, but Tullow has exercised its right of first refusal over any sale by its partner.

Yesterday, Ugandan energy minister Hilary Onek warned that the government, which must approve the Tullow deal, did not want one company to control its oil resources and industry. He also said it did not want just one company to control the three blocks, as this would create a monopoly.

But Mr Onek said the Ugandan government was aware of Tullow’s plans to bring in a new partner to help it develop the blocks and “concurs” with these proposals.

Tullow’s share price suffered after some reports interpreted Mr Onek’s remarks as indicating the Ugandan government favoured the Heritage-Eni deal. The reports were subsequently retracted.