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Ugandan oil field deal worth $1.35bn gets seal of approval

HERITAGE Oil said yesterday its shareholders had approved the proposed $1.35bn (£835m) sale of its Ugandan assets to either FTSE 100 oil explorer Tullow Oil or Italian rival Eni, as the bidders’ race to secure the support of the country’s government begins to hot up.

Well over 99 per cent of Heritage’s investors voted to dispose of its interests in the Lake Albert region, on the border of Uganda and the Democratic Republic of Congo.

The news came after it emerged Tullow had tried to woo the Ugandan government over to its side by presenting it with the choice of two potential co-investors in the assets – China National Offshore Oil Corporation (CNOOC), the group’s own preferred partner, or Total France. Both would take a 50 per cent stake in the fields in return for help in extracting, processing and transporting the oil to the coast, 1,300km away.

Tullow made its first move for the oil fields 10 days ago, when it exercised a pre-emption right to buy the assets from Heritage, which had previously agreed to sell to Eni.

But the eventual outcome of the deal lies in the hands of the Ugandan government.