Tullow CEO rules out takeover

The chief executive of Africa-focused Tullow Oil has ruled out a takeover of the company, saying the involvement of several African governments in its projects would make it too complicated to buy.

The oil industry, hit by a collapse in crude prices on the back of a global supply glut, is ripe for takeover deals as cash-rich players target smaller firms, a reality highlighted by Shell’s $70 billion (Sh6.58 trillion) move for BG.

But Tullow CEO Aidan Heavey said he had not received any offers for his company, which reported first-quarter trading in line with expectations on Thursday after making its first loss in 15 years in 2014. “You will be negotiating with every country in Africa. It’s a monumental task, it’s a distraction, we don’t even think about it,” he said.

London-listed Tullow has oil assets spread across the African continent, including Ghana, Kenya and Uganda, where state oil companies require an involvement in energy projects.

The company is in the process of making cost cuts of around $500 million over the coming three years, a process which is expected to come at a one-off $45 million (Sh 4.23 billion) cost in the first half of 2015 to cover redundancies and closures. Oil production from Tullow’s fields was in line with expectations in the first quarter, as were revenue and cost of sales.