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ExxonMobil invests $4 billion in Uganda October 13, 2009

Posted by mytruthaboutoil in Oil (general), Oil giants.
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Oil giant ExxonMobil invests $4 billion in Uganda’s oil company Tullow’s oil fields.

The news:

Mr Tim O’Hanlon, Tullow Oil’s vice-president for African business, told the Business Power that they were interested in “spreading [their] equity around.”

When asked if that included Uganda, Mr O’Hanlon said: “Yes…Uganda and Ghana are the jewels in our crown.”

He noted that Tullow has 100 per cent equity in many of its Ugandan exploration blocks, unusual in the oil business.

The Jubilee has also attracted investment from major private equity firms and had been the subject of a heated bidding war, which included state-owned Chinese player, CNOOC.

Even as oil the company profits spiked last year, investment in new plays stagnated. The market tightened as creeping resource nationalism caused many countries with significant reserves to restrict the operations of independent oil companies in favour of national champions.

Oil firms are thus playing a premium for oil fields in countries open to private investment, such as Ghana and Uganda.

Tullow hopes that Jubilee will begin to produce next year, eventually generating 120, 000 barrels per day. Development in Ghana has proceeded much faster than in Uganda because the infrastructural challenges that dog the industry here are not present in Ghana, where the industry is offshore.

Tullow’s share price dipped 0.58 per cent in trading last week, but is up nearly 40 per cent year-over-year. Oil rose 52 cents to settle at $68.56.

Tullow Oil is an Irish-based oil and gas exploration and production business headquartered in London. It is listed on the Irish and London Stock Exchanges and is a constituent of the FTSE 100 Index and ExxonMobil is an American oil and gas corporation.

It was formed on November 30, 1999, by the merger of Exxon and Mobil.

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