Energy

CNOOC to acquire exploration areas in Uganda

(Xinhua)
Updated: 2011-03-31 09:59

BEIJING - China National Offshore Oil Company Limited (CNOOC Ltd) said on Wednesday that it has signed an agreement with UK-based Tullow Oil plc (Tullow) for a one-third interest in three exploration areas in Uganda for $1.467 billion.

The transaction, which is subject to regulatory approvals by authorities in Uganda and China, is expected to be completed in the first half of 2011.

According to CNOOC Ltd, TOTAL SA (TOTAL) of France has also signed agreements with Tullow for the acquisition of another one-third stake in the three exploration areas.

The exploration areas, 1, 2 and 3A are located in the Lake Albert Rift Basin in Uganda, which is one of the most important prospective basins in Africa. As estimated by Tullow, more than one billion barrels of P-50 recoverable volume of oil has been discovered since 2006.

Upon the completion of the two transactions, CNOOC Ltd, Tullow and TOTAL will each hold a one-third stake in the three exploration areas.

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CNOOC Ltd, Tullow and TOTAL are looking to coordinate operations and integrate development plans across the three exploration areas in the Lake Albert Basin. It is expected that more than 200,000 barrels of oil will be produced each day in the area.

Yang Hua, the Chief Executive Officer of CNOOC Ltd, said that the transaction to gain entry into the Lake Albert Basin signifies another milestone for the company in its expansion of its overseas business. The area is one of the key frontier basins in East Africa.

Li Fanrong, president of CNOOC Ltd, said that the project is expected to become one of the largest oil and gas developments in Africa in recent years.

The agreement will help CNOOC Ltd establish its second major production area in Africa following Nigeria. The deal is also expected to contribute to the long-term growth of the company, he said.

CNOOC Ltd, which is listed in Hong Kong and New York, is a subsidiary of China National Offshore Oil Corporation, China's largest offshore oil producer.