Elias Biryabarema
4 February 2008
Kampala — UK's Tullow Oil has sold its petroleum assets in the Congo Republic (Brazzaville) to raise capital to pursue its Uganda operations more aggressively, a statement released on Wednesday says.
The development brings a notch or two up the continuing efforts to tap the petroleum deposits struck in South Western Uganda in early 2006.
Particularly, it renders traction to plans to start a scaled-down petroleum production and refining project in 2009 to feed a 50-100MW thermal power plant.
In the announcement, Tullow said it was selling its 11per cent stake in Congo's M'Boundi field to South Korea's -Korea National Oil Company, for $435 million.
Mr Aidan Heavey, the Chief Executive of Tullow Oil, said the sale of its Congo assets was part of the company's portfolio management strategy and that it would permit the company to direct "resources in core growth areas," in Uganda and Ghana.
It wasn't clear why Tullow had to offload its apparently promising Congo assets to invest in Uganda but it appeared the company could have failed to find any other preferable source of capital urgently required to finance its ongoing exploration and imminent production activities in Uganda.
The company's General Manager in Uganda, Mr Brian Glover, declined to comment. Dow Jones Newswires quoted a London analyst as saying there were concerns that Tullow Oil would not raise sufficient capital to cover the company's spending requirements for this year, particularly to develop its assets in Uganda and Ghana.
In the statement, Tullow Oil said it had begun to reallocate capital resources to projects where it has more material "participation and influence." In Uganda Tullow Oil wholly owns Exploration Block 2 and co-owns, in equal stakes, 1 and 3A.
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