Tullow Oil reinforces belief in Africa
Tullow is shifting its corporate focus to Africa. The company is withdrawing from its mature basins as it looks for new fields in Africa. Already, it has sold majority stakes in two UK North Sea gas fields to Faroe Petroleum for $75.6 million, a deal that marks the beginning Tullow’s African focus.
Aidan Heavey, Tullow chief executive said; “Our strategy is about finding our own big fields and the UK is not part of our business strategy anymore.”
Tullow had announced its intention to sell its UK and Dutch Southern North Sea assets in late 2012 but found it difficult to attract buyers. 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 in Africa. The company said it was continuing to look for buyers for its other British and Dutch Southern North Sea assets.
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.
Mixed outcomes
At the time Tullow announced its change of strategy to finding its own oil in Africa, the company suffered a string of disappointing exploration results prompting it to halt its Mauritania drilling programme and is under pressure to restore its reputation.
However, the company has 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 this year, despite issues with an onshore processing facility. The firm’s TEN development in Ghana is progressing well and on track to deliver first oil in mid-2016, while it has signed a memorandum of understanding with the Ugandan government for a commercialization plan for the Lake Albert development.
Tullow expects well results from high-impact exploration campaigns in Kenya and Ethiopia. It’s drilling success in northern Kenya had continued with a further two discoveries from three wells drilled during the period. The campaign in the basin has now delivered seven successful discoveries from eight wells drilled to date. The firm also reported that its initial two-well exploration campaign offshore Mauritania has been concluded, with analysis of the results and integration of seismic data to be carried out before the next well locations and timings are confirmed.
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 barrels of oil per day and an oil export pipeline.
Frank Uzuegbunam