25 Jul 2014 – Rostec, a Russian state corporation, has began the process of selecting advisers for its potential acquisition of Tullow’s [LON:TLW] stake in the Albert Basin oil field in Uganda, a source told this news service.
Mergermarket first reported Rostec’s interest in the asset in May, when a source told this news service that the Russian firm had approached Tullow with an expression of interest.
However, Tullow denied it is divesting the Albert Basin, in which it owns 33% after farming out to Total and CNOOC in 2012. Total and China National Offshore Oil Corp (CNOOC) also hold 33% interests in the oil field. Tullow and its partners have estimated the oil field will yield a production volume of 200,000 bbl/d.
“Tullow is not selling down its assets in Uganda and has not begun a process to sell down any assets in Uganda. No discussions with Rostec, either formal or informal, have been entered into on this issue. Tullow remains committed to Uganda for the long term and the company will stay in Uganda for the development and production phase,” said a company spokesperson.
The firm has had a tumultuous relationship with the Ugandan government, which resulted in a legal dispute that cumulated in the Irish firm being hit with a USD 407m tax demand by the Ugandan government.
Rostec 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. The other bidder in the running is SK Energy [KRX:03600] a South Korean firm, according to public announcements. The winner is expected to be announced imminently.
Rostec did not respond to a request for comment.
Tullow has a market cap of GBP 6.9bn.
By Katie McQue