China state oil company to buy Tullow’s stakes in Bangladesh

Dhaka (Platts)–8Aug2012/342 am EDT/742 GMT

The China National Offshore Oil Corporation (CNOOC) is in talks to buy UK-based Tullow Oil’s assets in Bangladesh, an industry insider said Wednesday.

If negotiations are successful, it will be CNOOC’s first investment in Bangladesh’s oil and gas sector, he said.

CNOOC bid for shallow water gas block SS-08-01 in Bangladesh’s 2008 bidding round but was not successful, the source said. It is mulling taking part in Bangladesh’s next offshore bidding round, which is slated for later this year, he added.

Tullow Oil is planning to divest all its Asian assets, which are located in Bangladesh and Pakistan, and has held preliminary talks with several oil companies, Platts reported earlier.

Australian exploration and production company Santos has also held preliminary talks to buy Tullow assets in Bangladesh, Santos’ President in Bangladesh John Chambers said Wednesday.

The shift away from Asia will allow Tullow Oil to focus on its core operations, its huge Jubilee discovery offshore Ghana, and its exploration acreage in South America and elsewhere in Africa.

Tullow’s sales revenue from Asia totaled $20.8 million in 2011, while its global sales revenue totaled $2.3 billion.

Tullow Oil has a 30% stake in Bangladesh’s Bangora gas field about 150 kilometers from the capital Dhaka, with gross output of around 100,000 Mcf/d, or about 17,000 boe/d. Tullow’s share from the field is about 5,100 boe/d.

Its other interest in Bangladesh is the shallow offshore gas block SS-08-05, which it was awarded in the country’s February 2008 bidding round. A PSC has yet to be signed with Petrobangla as neighboring India is opposing the deal, claiming a major portion of the block lies in its territory. The issue is before the Hague’s Permanent Court of Arbitration.

In Pakistan, Tullow has exploration, development and production interests across seven licenses spanning 13,171 sq km (4215 sq miles).

CNOOC in February partnered France’s Total in a $2.9 billion deal to buy a third of Tullow Oil’s stakes in three oil exploration areas in Uganda.

–Mohammad Azizur Rahman, –Edited by Wendy Wells,