Following the unending denial of dividend on their investments, shareholders in Tullow Ghana Limited have called on the company to review its dividend policy to the holders’ advantage.
Though the stock traders admitted that oil prices on the world market have seen a sharp downturn since 2014, they still held that, as investors, reviewing dividend policy would enable them enjoy some returns on their equities.
The concern was raised during a question and answer session at the 2017 Tullow Oil plc Ghana investor forum, which saw several stock holders raising varied and cogent concerns on their investments.
Tullow Oil plc is a leading independent oil exploration and production company, focused on finding and monetising oil in Africa and South America.
Tullow Oil plc, through its subsidiary, Tullow Ghana Limited, has interests in two exploration blocks in Ghana – Deepwater Tano and West Cape Three Points.
Tullow is the operator of the Jubilee field, which straddles both blocks, and now the TEN project, which takes its name from three offshore fields under the development – Tweneboa, Enyenra and Ntomme.
Responding to the concerns of the shareholders, Paul McDade, Tullow Group Chief Executive Officer (CEO), explained that the difficult market conditions on the oil market had affected dividend payments to the shareholders.
Not only Tullow Oil plc, but all oil industries, are struggling to recover from the price slump that has hit the market since 2014.
As a consequence of Tullow’s inability to pay any dividend to its shareholders, Mr. McDade said the Group would be rolling back its investments into exploration beyond their block for better performance on the market, to pay the needed dividend to the stockholders.
Investing in their assets in Ghana would allow cash flow. That way, Tullow would not be relying on the oil price recovery to pay dividends and to settle its high level of debts.
However, Mr. McDade was hopeful that oil prices would perform better on the world market this year.
Furthermore, he said Tullow Oil plc is in pole position to drill more wells at TEN as soon as the boundary dispute between Ghana and La Côte d’Ivoire is resolved.
The boundary decision is expected late this year, and plans are underway to recommence drilling, with 80,000 barrels of oil expected to be produced daily.
Until the injunction placed on drilling oil on the TEN field by the International Court of Justice, South Holland, following La Côte d’Ivoire’s claim that Ghana had trespassed into its boundary, the field was producing 50,000 oil barrels of oil daily.
In this regard, he said Tullow Oil is in discussion with the government on more exploration.
By Inusa Musah