Heritage, ENI deal Upsets the Landscape
Heritage Oil has announced that it is to sell all of its Ugandan assets to ENI.
Heritage Oil Plc , an independent upstream exploration and production company, announces that a wholly owned subsidiary has entered into a binding letter of intent , with Eni S.p.A for the sale of its entire interests in Blocks 1 and 3A in Uganda.
The deal is important for a number of reasons.
1) Realisation of the reserves value requires a great deal of investment. ENI alludes to this here:
The development of these resources will require great synergy with Uganda’s infrastructure programs, in respect of which Eni intends to play a leading role in partnership with the Authorities.
2) Heritage’s partner, Tullow Oil, is now stuck, as they don’t have the required cash and they may find it more difficult to sell a share in their assets.
3) Doubt has now been raised over Heritage’s deal with Genel Enerji. Whether this is directly linked or not is too early to say.
What it certainly does is secure the future of Uganda’s oil sector by bringing a strong player in. As major investment is needed in oil pipelines and a refinery, this is very important.
