Tullow about to sell off some oil licences
Tullow Oil, the Dublin-listed exploration company, said it expects to finalise the sale of oil licences in Uganda within weeks while the International Energy Agency warned that high oil prices are threatening economic recovery in the West.
Tullow said it performed strongly so far this year and was finalising the remaining conditions on a deal that allows it to sell a portion of its Ugandan oil licences to French giant Total and the China National Offshore Oil Company in the next few weeks. The deal will give Tullow $2.9bn (€2.03bn) in cash.
The London-based company forecasts strong production growth this year as output comes on stream from its Jubilee field in Ghana.
The company also plans to drill a number of significant wells with basin-opening potential in West Africa and South America.
In Paris, the International Energy Agency (IEA), which gives advice on energy to industrialised nations, trimmed its global oil demand growth estimates to 1.29 million barrels per day from 1.43 million barrels in its previous report.
"We have seen demand growth slowing compared to last year's level and we're seeing it concentrated where the price feed through is most direct, notably in North America, in terms of gasoline," said David Fyfe, head of the IEA's markets division. Petrol prices of near $4 a gallon in the US will lead to fewer road trips this year than last, the IEA said.
Preliminary March data showed a marked slowdown in global oil demand, although the IEA warned the data could be distorted by the devastating earthquake in Japan and the Easter holiday period.
"Persistently high prices at this stage of the economic cycle may ultimately sow the seeds of their own destruction. Until then, the market confronts fundamentals that still look likely to tighten in the second half of 2011," it said in the report.
This makes the agency the most pessimistic among leading industry forecasters.