tullow buys into more licences in east africa

Tullow buys into more licences in East Africa

Thu Sep 2, 2010

LONDON (Reuters) - Oil explorer Tullow Oil is buying 50 percent stakes in six exploration licences in Kenya and Ethiopia as the hunt for oil in East Africa gathers pace.

Tullow said on Thursday the positions it is acquiring are in the East African Rift Basin, which has a similar geology to Uganda's Lake Albert Rift Basin where it has discovered oil fields big enough to turn Uganda into a top-50 oil producer.

London-listed Tullow will become the operator of five licences as part of a deal with Canadian explorer Africa Oil Corp, building on a farm-in agreement on a sixth block in the same region announced in August with Canada's Centric Energy.

Interest in East Africa, which is much less explored than West Africa, has been rising on the back of Tullow's Ugandan discovery and a gas find by U.S. firm Anadarko off the coast of Mozambique in February.

Oil major Exxon Mobil and Britain's BG Group both farmed into Tanzanian blocks earlier this year, while explorer Afren in June bought a Canadian company with 12 blocks in Ethiopia, Kenya, Madagascar and the Seychelles.

Under the terms of the deal, which is subject to formal government approvals, Tullow said it would reimburse pro-rata past costs in each block and pay Africa Oil's future costs up to $23.75 million.

Shares in Tullow closed at 1,234 pence on Wednesday, valuing the company at 10.8 billion pounds.

Thomson Reuters 2010 All rights reserved
==========================================
Link to article:
http://af.reuters.com/article/investingNews/idAFJOE68106I20100902