China announces plans to buy into Tullow's Ugandan assets

5-Feb-2010

Chinese state-owned oil giant CNOOC plans to invest $2.5 billion in Tullow Oil's stake in Ugandan oil projects, the Wall Street Journal reported this week.

Tullow - which succeeded in wresting control of Heritage Oil's Ugandan stake from Eni - was reportedly looking for a partner to develop Uganda's oil production infrastructure. Uganda is one of the world's poorest nations, and oil was only recently discovered there - meaning that oil majors looking to develop the country's resource base need to start from scratch.

Tullow chief executive Aidan Heavey said recently that its putative partner would be responsible for the construction of a 1,200-kilometer pipeline to Mombasa, in Kenya.

China is no stranger to infrastructure projects, either at home or in Africa. Its expertise is so highly regarded that the World Bank indicated that it would look to partner with China on African development projects.

"We welcome China's investment in sub-Saharan Africa," bank president Robert Zoellick said this week. He added that the partnership could help African nations "build infrastructure and create additional jobs."

According to the Journal, Uganda plans to produce 150,000 barrels of oil per day by 2016.

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