Friday, March 20, 2009

China, Tullow and a little far away Australian spec

In spite of a €1.6bn refinancing and a surprise €430m rights issue recently, Tullow apparently faces major funding hurdles over its oilfields in landlocked Uganda. Reports suggest it might have to sell part of the oilfield to a partner because Uganada has no oil infrastructure and a vast pipeline would need to be constructed to bring the oil across Uganda and through Kenya to the sea where it could be exported. The cost of building such an enormous pipeline would be prohibitive for Tullow.
It would need a partner!
And of course which sovereign wealth fund has that capability and has been engaged in extreme dollar diplomacy in West Africa?
And which sovereign entity has been running the ruler over Tullow as a whole?
DeepLode has written extensively on the activity of China in West Africa and of its interest in Tullow. There is no doubt Tullow needs another huge injection of money to keep up its activities in West Africa. China has both the cash, the willingness to take the risk and the political debts it can call in to get it all happening.
And of course there is the matter of our tiny spec First Australian Resources which has a huge acreage off shore from Senegal courtesy of the Senegal Government which is now almost totally reliant on China (and to some extent Indian) support.
FAR is about to announce its Joint Venture partner…..and has been a bit slow to do so…
Maybe a waiting game while China decides which of its three giants gets the partnership…or to avoid criticism of its “oil diplomacy”.. backs Tullow into it under its control.
Whatever DeepLode is watching closely.

As is the thread on
If you are not there you will miss it all.

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