Tullow bids $1.5bn for Ugandan oilfields

Shares in Tullow Oil rose 13p to 1,352p today after the explorer increased its presence in Uganda by bidding $1.5 billion (£916.7 million) to buy two oilfields from its partner, Heritage Oil.

Tullow exercised its pre-emption rights for the oilfields, in the Lake Albert area, after Heritage agreed to sell them to Italian energy giant Eni. The Ugandan government will decide whether to allow Tullow or Eni to buy the assets.

Tullow owns another Ugandan oilfield outright, and if its bid is approved it will try to package the fields and farm out their management to a downstream operator with experience in building the pipelines and refinery needed to develop them.

It said the fields could produce more than 150,000 barrels of oil a day but need a 1,300-kilometre pipeline to bring them into production.

Tullow chief executive Aidan Heavey described today's bid as an "excellent opportunity". "Tullow is committed to retaining a material stake in Uganda," he said.

Mr Heavey said the firm was "working closely" with the Ugandan government.