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Tullow Oil starts North Sea withdrawal to focus on Africa

Tullow Oil has sold majority stakes in two UK North Sea gas fields to Faroe Petroleum for $75.6 million, a deal that kick-starts Tullow's withdrawal from mature basins as it looks for new fields in Africa.

The London-listed FTSE 100 company had announced its intention to sell its UK and Dutch Southern North Sea assets in late 2012 but found it difficult to attract buyers.

Faroe Petroleum, which focuses on the North Sea, Norway and Iceland, will take over operatorship of the Schooner and Ketch gas fields after buying stakes of 53.1 percent and 60 percent respectively.

Analysts said the sale value was reasonable considering the maturity and amount of gas left in the fields.

Tullow Oil bought the fields from Shell and Exxon Mobil nearly ten years ago but the company's focus is now shifting to its own discoveries.

"Our strategy is about finding our own big fields and the UK is not part of our business strategy anymore," said Tullow Oil Chief Executive Aidan Heavey.

The company said it was continuing to look for buyers for its other British and Dutch Southern North Sea assets.

Tullow Oil, which halted its Mauritania drilling programme last week, has suffered a string of disappointing exploration results and is under pressure to restore its reputation.

The company maintained its 2014 production target at between 79,000 and 85,000 barrels of oil equivalent per day.

Its flagship Jubilee field offshore Ghana is one of the projects Tullow Oil is counting on to turn around its fortunes.

The field is on track to produce an average 100,000 barrels of oil per day (bopd) this year, despite issues with an onshore processing facility.

In Uganda, Tullow Oil has signed a memorandum of understanding with the government that foresees the construction of an oil refinery with a capacity of up to 60,000 bopd and an oil export pipeline.

The government is set to choose an investor to finance the refinery construction by the end of the third quarter, Tullow said on Wednesday.

The Africa Report