ExxonMobil Mulls Entry in Tullow's Ugandan Project

LONDON (Dow Jones), Oct. 26, 2009

Exxon Mobil Corp. is studying a possible entry in Tullow Oil PLC's Ugandan project, people familiar with the matter said Monday, as oil majors seek to expand into new African territories.

The U.S. oil giant is joining France's Total SA, Eni SpA of Italy and China state-owned CNOOC Ltd. as a potential partner pre-selected to enter the data-room of the Ugandan oil project.

Tullow confirmed Friday it had opened the data room to potential buyers of a stake in its Ugandan oil blocks after agreeing with the government on a shortlist of possible partners.

A spokesperson for ExxonMobil said it "routinely evaluates potential development opportunities around the world" but declined to comment further. Tullow and the Ugandan government declined to comment on any potential partner.

Apart from oil and gas development, the project entails a refinery and a pipeline to the Indian Ocean, with costs totaling $5 billion to $6 billion, according to a person familiar with the project.

Western oil companies have been present for years in Angola and Nigeria, Africa's largest oil producers, but are now vying with Chinese state companies to expand in emerging oil nations such as Ghana and Uganda.

Earlier this month, ExxonMobil bypassed CNOOC by entering a binding deal to buy Kosmos Energy's stake in the Jubilee field offshore Ghana. The acquisition is estimated at $4 billion.

However, other foreign oil companies including Total, BP PLC, CNOOC and Sinopec, have held talks to join Ghana National Petroleum Corp. in a competing bid for the stake.  

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