Tullow to bid for oil blocks – Plans to drill eight new wells in 2019

Business News of Wednesday, 31 October 2018

Source: Myjoyonline.com

2018-10-31

Kweku Awotwi,Managing Director of Tullow Ghana

Tullow Oil Plc has declared its intention to participate in Ghana’s first ever oil and gas Competitive Licensing Round Bid Evaluation and Negotiation (LRBEN).

Speaking in an interview with the media when the company took its turn at the Ghana Stock Exchange’s facts behind the figures session in Accra, the Managing Director of Tullow Ghana, Kweku Awotwi said “when the government launched the bidding round last week, our chief executive officer and other senior members of the executive team were there and we are looking at what kind of partnerships we will form to participate in the six blocks that have been made available.”

“We see opportunities for Tullow right across the acreage that is available, and we will be making a case to government that we have the skills, expertise, knowledge and history of success to make another major exploration impact in Ghana,” he added.

He said Tullow was already on the ground as it had the infrastructure in place that put it in an advantage to deliver any identified production or reserves quickly on stream.

“If you are a new company, you have to build a new infrastructure and that will take you a number of years,” he stated.

The government recently launched the oil and gas Competitive Licensing Round Bid Evaluation and Negotiation (LRBEN) which is expected to bring more transparency in the sector.

Ghana’s Oil Exploration and Production Act, (Act 919 –2016) stipulates that the allocation of a new exploration rights to perspective investors should be done through an open, fair, transparent and public bidding process.

In all, six oil blocks are available for bidding and allocation. It is expected that interested investors go through the bidding process to be allocated the right to exploit the country’s oil blocks.

This competitive bidding process forms part of a series of future oil and gas licensing rounds initiated by the government to exploit the country’s oil blocks to reach the estimated production of 100 million barrels of crude oil per day.

Plans to drill eight new wells

Mr Awotwi also disclosed the company’s plans to drill up to eight infill wells in 2019.

He said the rig agreements gave the company maximum flexibility to optimise the drilling schedule as the wells come on-stream.

Since Tullow and its partners commenced the delivery of the Jubilee project in record time of 40 months, he said they had invested $16 billion in

Ghana, delivering around 180,000 barrel of oil per day of production with the potential to deliver more.

He said the company had had good results from the drilling programme so far with all wells being delivered on time and within budget.

Mr Awotwi said management made the decision to bring in a second FPSO to accelerate the tie-in of new wells and would have five new wells online around the end of the year; two at Tweneboa, Enyenra, Ntomme (TEN) and three at Jubilee.

He said this would enable the company to increase production at TEN to around 80,000 barrels of oil per day and sustain Jubilee at 100,000 barrel oil per day.

Tullow first half performance

Tullow oil delivered a strong performance in the first half of 2018 as its revenue increased from $788 million in the first half of 2017 to $905 million.

The company also recorded a profit of $55 million in the first half of the year, compared to a loss of $348 million for the same period last year.

The strong performance is attributed to the ramp up in oil production at the Jubilee and TEN fields.

The company is currently producing about 175,000 barrels of oil per day.

This was disclosed by the Chief Financial Officer (CFO) of Tullow Oil, Les Wood when the company took its turn at the Ghana Stock Exchange’s facts behind the figures on October 23.

He said its earnings before interest, taxes, depreciation, amortisation and exploration expense (EBITDAX) also increased from $544 million in the first half of 2017 to $764 million.

Free cash flow also grew from $205 million to $401 million over the same periods, while capital investment also increased from $77 million to $145 million.

“Overall, we are delivering solid production and generating material free cash flow,” Mr Wood stated.

“We have put a number of challenges behind us and we are focused on increasing production in West Africa, and progress our East Africa developments. We are also commencing a multi-year exploration campaign across South America and Africa,” he added.

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