Tullow keen on new discoveries

After delivering the world’s fastest deep-water oil field – Jubilee – in 40 months from exploration to first oil and following it up with the TEN fields, Tullow Oil says it is keen on leveraging on its exploration success to make “major new discoveries” in Ghana as government prepares to announce its first licencing bidding round.

The operator of the Jubilee and TEN fields has been telling the story of its ten-year journey in Ghana, and according to its Director of External Affairs, Cynthia Lumor: “We are in the best position to continue new exploration in Ghana; we’ve been operating the longest; we know the fields; we know the area and therefore we would like that opportunity to obtain new licences”.

Government, in May, announced the establishment of a committee that will supervise the competitive bidding process for oil blocks.

The committee is to assess investors seeking to start oil exploration and production in Ghana, and advise the minister before an agreement is entered into.

“The terms of reference for the committee are: to prepare all the necessary documentation for a successful bid round; assess and package all the data on the acreages; set up an online data room where all the data can be accessed by prospective bidders; and embark on promotions and roadshows in collaboration with the Petroleum Commission.”

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Cynthia Lumor told journalists at a ‘telling our story’ meeting that the company is very much looking forward to the bidding round and to “securing new licences with viable terms and conditions”.

The company, she said, is proud to have been a significant contributor to stable power supply in Ghana through its provision of gas for power generation, aside from paying some US$845million in taxes and fees to government.

Per the agreement with government, the lead partner and operator of the two oilfields is supplying some 200billion cubic feet of ‘foundation gas’ for power generation at no cost to government – of which it has supplied 64billion cubic feet so far.

The country, it said, will make savings of between US$1.7billion and US$2billion on the free gas deliveries, beyond which a yet-to-be-disclosed tariff will kick-in.

After the ITLOS ruling on the maritime boundary dispute, the company has been working frantically to make up for lost time and boost oil production – particularly at the TEN fields on which a moratorium was placed while the case was heard.

It increased its gross full year (FY) production forecast for TEN from 64,000 to around 65,500 barrels of oil per day, on the back of a strong half-year performance.

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Tullow said the TEN fields performed well in the first half of 2018, with gross production expected to average around 65,100 bopd (net: 30,700 bopd).

On Jubilee, the company said two new production wells were drilled and are expected to be completed and brought onstream during the third and fourth quarters of 2018.

“We are accelerating production and cash flow-growth across West Africa; we continue to make good progress toward sanctioning our developments in East Africa – and, having refreshed the exploration portfolio, we are about to embark on a multi-year frontier drilling campaign targetting high-impact prospects in Africa and South America. There is much to look forward to for the remainder of the year and beyond,” Chief Executive, Paul Mcdade, said in the company’s trading statement and operational update released in June.

Full year gross production at Jubilee is expected to average around 78,100 bopd, up from 75,800 bopd gross.

Contracts

The company disclosed that out of a total US$15.1billion in contracts awarded so far, US$1.5billion went to wholly-owned indigenous companies, while US$8billion worth of contracts went to international companies registered in Ghana and companies in which there is Ghanaian participation (JVCs).

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