British oil company Tullow Oil plc (TLW.L) Monday said its subsidiary, Tullow Uganda Ltd., on January 17, has exercised its right of pre-emption in respect of the proposed sale of Heritage Oil & Gas Ltd.'s (HOIL.L) 50% stake in Blocks 1 and 3A in Uganda.
There were reports Sunday that Tullow would exercise a right to buy the Ugandan oil fields from its partner Heritage Oil, by potentially derailing Italian oil firm Eni International B.V., a wholly owned affiliate of Eni SpA (E). In December, Heritage Oil had signed a deal with Eni for the sale of its 50% interest in Blocks 1 and 3A for up to US$1.5 billion.
According to Tullow, on December 18, Heritage said the transaction consideration comprises US$1.35 billion cash and a further contingent, deferred consideration of either US$150 million cash or an interest in a mutually agreed producing oil field independently valued at a similar amount.
Tullow stated that a syndicate of its core relationship banks has provided the banking facilities required to enable it to exercise the right of pre-emption.
Heritage owns 50% of Block 1 and 50% of Block 3A. Tullow owns half-interests in Block 1 and 3A, and also owns 100% of Block 2. For the past several months, Heritage has been in talks to acquire Genel Energy International Ltd., a Turkish energy company and its partner in Miran.
Tullow also said pursuant to the right of pre-emption, Tullow Uganda will enter into a sale and purchase agreement with HOGL, a subsidiary of Heritage Oil. The completion of the agreement is subject to certain conditions, including approval by Heritage shareholders at a meeting scheduled to be held on January 25 and receipt of necessary consents from the Ugandan Government.
Further, Tullow stated that in parallel with exercising the pre-emption right, it has been running a transparent farmout process. It has attracted a significant amount of interest from major international and national oil companies. The process is now well advanced, and potential partners are supportive of the group's decision to pre-empt, the company noted.
Commenting on the exercise of the pre-emption right, Chief Executive Aidan Heavey said, "Over the last six years, Tullow and Heritage have invested over US$700 million in the Lake Albert Rift basin in drilling 27 wells to prove up over 700 million barrels of oil and identify over 1.5 billion barrels of potential yet to be explored."
He also stated that Tullow is committed to retaining a material stake in Uganda and to continue to invest for the long term. The company is working closely with the Ugandan government to introduce a mutually beneficial partner with downstream expertise.
"The pre-emption of the Heritage transaction, and completion of Tullow's farmdown process, is an excellent opportunity to deliver an accelerated basin-wide development plan best suited to Government needs and to optimise value for all stakeholders," Heavey added.
Tullow has interests in over 85 exploration and production licences across 23 countries and focuses on four core areas, Africa, Europe, South Asia and South America.
TLW.L is trading at 1,352 pence on the LSE, up 13 pence, on a volume of 1 million shares.
HOIL.L is up by 4 pence and is trading at 518 pence on the LSE, on 709,339 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.