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May 7, 2012

Tullow Expects Approval for TEN Field in Third Quarter


Tullow Oil PLC says it expects to secure approval to commence work on a second field TEN in the third quarter of this year.

Mr Aidan Heavey, Chief Executive Officer, Tullow Oil PLC, who announced this, said good progress, was made in appraising the TEN discoveries last year and that the company target is to produce 100,000 barrels-per-day from the field. TEN is estimated to have oil reserve estimates of between 200 million and 1.2 billion barrels.

Speaking to journalists shortly after the first-ever investor forum organised by Tullow Ghana Limited (TGL) to update its local shareholders on the company’s performance for 2011, Mr Heavey said the phase 1A development of the Jubilee field was sanctioned in January and drilling of the first production well commenced on schedule in February.

“This development will be conducted over an 18- month period and the total cost is expected to be approximately $ 1.1 billion,” he said.

Mr Heavey said oil production from the Jubilee field was likely to hit the 120, 000 production target in 2013, attributing the delay in achieving the target to sand seeping and blocking of the wells.

"We are currently doing around 70,000 barrels per day and while doing that we are also looking at various ways of enhancing the production to around 90,000 barrels by the end of this year and probably ramp up to 120,000 barrels next year," Mr. Heavey said.

He said Tullow was exploring various options to address the problem and that steady progress had been made.

"We are sure one of the options we have will solve the problem for the long term to enable production progress," he said, adding that Tullow is expected to spend about $400 million to address the technical challenges.

"The cost could be cheaper, depending on which option works out well at the end of the day, but we estimate to spend about $400 million maximum on this," he said.

Answering a question on how the company to promote local content in its operations, Ike Duker, Executive Chairman, Tullow Ghana Limited said the issue was at the heart of the company’s operations because of its commercial advantages.

He said local capacity building and capability development helps to ease access to local raw materials for the company whilst creating shared prosperity in the country.

He said an entire department to focus only on local content had been established, demonstrating the company’s commitment to the country for the long-haul.

Source: GNA