IRISH EXPLORER Tullow Oil has moved to quash speculation that it has signed a deal to sell part of its Ugandan asset to Chinese giant Cnooc.

News agencies had reported that Cnooc had agreed to pay $2.5 billion for a stake in Tullow’s project in Uganda’s Lake Albert rift basin.

However, Tullow said yesterday: “No agreement has been signed with any company at this stage. We will not reach agreement with any company until the proper process has been completed with the government of Uganda.”

Tullow recently agreed to pay a total of $1.5 billion to buy its partner, Heritage Oil, out of its 50 per cent stakes in two Ugandan fields.

Heritage shareholders voted to accept Tullow’s offer last month, but the Ugandan government, which controls exploration licences, still has to give its approval.

The deal will give Tullow control of three oil fields with potential reserves of 2.2 billion barrels. It intends bringing in at least one partner to develop the infrastructure needed to exploit the fields.

Both Cnooc and French multinational Total have been mentioned as potential suitors.

Cnooc spokesman Jiang Yongzhi declined to comment. Total said last week it was also interested in teaming up with Tullow there.

Competition for new resources in Africa is heating up as traditional fields go into decline and nations from Venezuela to Russia curb access to resources.

Tullow has drawn up a shortlist of partners to help with the estimated $5 billion cost of developing its Ugandan fields.

In January, Tullow exercised its right of first refusal over the blocks that it co-owns with Heritage Oil in an effort to thwart an agreed $1.5 billion deal with Eni, Italy’s biggest energy producer.

Tullow, which operates in 15 African countries, plans to produce at least 5,000 barrels a day in Uganda in 2012, with output rising to 150,000 barrels a day within five years. – (Additional reporting: Bloomberg)