Libya Not after Uganda Oil in Reported Eni Deal

Any bid by Libya to purchase shares in Italy-based Eni Spa (E) wouldn't be about Ugandan oil, Uganda's Minister of Foreign Affairs Sam Kutesa said.

Libya "has more oil than Uganda will ever find," Kutesa said in a statement, dismissing concerns that Libyan president Moammar Gadhafi wants access to two oil blocks that Eni is in the process of acquiring stakes in on the Ugandan side of the Albertine rift.

The minister was responding to press reports that cited Italian media as saying Libya wanted to buy up to 10% of Eni's shares, which would make it the second-largest shareholder in the company after the Italian government.

Eni has proposed a takeover of Heritage Oil 50% interest in blocks 1 and 3A, where up to 2 billion barrels of oil has been discovered since 2006. Government sources said that Uganda is supporting the entry of Eni in its oil sector as the Italian company can help develop the country's downstream oil industry.

Libya's state-owned oil company, Tamoil, was awarded a contract in 2007 to extend the Mombasa-Eldoret oil pipeline to the Ugandan capital Kampala. However, disagreements between Uganda and Kenya over the design of the pipeline have delayed its progress. - Nasdaq