Taking aim: Eni is set to expand its footprint in Africa
Heritage sells Ugandan assets to Eni
UK explorer Heritage Oil said it has agreed to sell its Ugandan interests to Eni for up to $1.5 billion as the Italian giant continues to build its presence in Africa through acquisition.
The UK outfit is the operator and holds a 50% interest in two licences in Uganda. The fields are estimated to contain more than 700 million barrels of gross resources.
Tullow Oil holds the remainder of the two licences located in the Albert basin, close to the Democratic Republic of Congo, and is looking to sell up to 50% of its stake.
Heritage, whose other main assets are undeveloped fields in Iraq's semi-autonomous Kurdish region, added it had terminated merger talks with Turkey's Genel Energy, a unit of the Cukurova Group, one of Turkey's largest conglomerates.
Heritage entered the merger talks with the plan that cashflow from Genel's new Kurdish oilfields, which were ramping up production, could be used to bring Heritage's Kurdish fields onstream.
However, a spat between the Kurdish region and Baghdad means companies producing in the region are not paid for any oil they try to export through Iraq. Heritage had hoped the long-running dispute would have been solved by now.
Eni will pay $1.35 billion upfront and a further consideration of either $150 million in cash or a stake in a producing oil field of a similar value within two years, provided certain conditions are met, reported Reuters.