|
28 May 2014 – Rostec, a Russian state corporation, is looking to acquire upstream oil assets in Uganda to feed that country’s first oil refinery it is bidding for, a source told this news service. The Russian entity is part of a consortium, alongside VTB Capital and Tatneft, bidding for the construction of the Hoima oil refinery, situated near the Albert Basin oil field. Should it win, it would need to secure feedstock for the refinery, which will have a capacity of 60,000 bbl/d. Other firms bidding for the refinery include China Petroleum Pipeline Bureau, Petrofac, SK Energy, Marubeni and Vitol. The winning bidder is expected to be announced in July. “Rostec is looking to make a decision on how to acquire the upstream assets within the next six months,” the source said. “It’s a chicken-and-egg situation. There is a need to know how, and this guarantee is also required so that debt financing can be accessed to build the oil refinery.” Assets of interest to Rostec include the Tullow [LON:TLW] stake in the Albert Basin oil field, the source said. It is also looking at other assets in Uganda and the Democratic Republic of the Congo, and may participate in upcoming licensing rounds. But Tullow does not intend to sell its assets in Uganda, and it has not begun a process to sell any Ugandan assets, a spokesperson said. “Tullow remains committed to Uganda for the long term and the company will stay in Uganda for the development and production phase.” Earlier this year, however, Tullow’s chief operating officer said the firm would consider selling a part of its stake in the Albert Basin in favour of concentrating on its assets in neighbouring Kenya. Tullow owns 33% of the Albert Basin, after farming out to Total and CNOOC in 2012. Tullow and its partners have estimated the oil field to yield a production volume of 200,000 bbl/d. So a Tullow’s stake would cover the needs of the refinery, a sector analyst said. Tullow is yet to receive a production license from the Ugandan government, which the source and a Ugandan banker believe would delay a potential deal. “Many of us expect Tullow to sell down its stake or sell out completely once it receives licensing. It would be a good thing,” the analyst noted. “The company could cash in and avoid the capex associated with the working interest.” Tullow obtained exploration licenses in Uganda in 2004, and made significant oil discoveries in the Albert Basin in 2006, according to its website. It applied for a production license for the Albert Basin last year. It has not yet been granted by the government, though it is expected shortly, the banker said. The banker also said Tullow’s relationship with the government was difficult. He cited a dispute over the government claim for US 400m in capital gains tax after Heritage Oil sold assets worth USD 1.45bn to Tullow in 2010. Earlier this month, the government repossessed the Ngassa oil field from Tullow, after it missed its appraisal deadlines. “CNOOC and Total appear to be less of a target. Nothing is off the table. A likely transaction would be with Tullow,” the banker added. Tullow’s market cap is GBP 7.7bn. by Katie McQue |
Katie McQue 