Ghana well results are big boost for Tullow Oil
'Significant' Owo find is positive diversion from politicking
TULLOW Oil, the biggest company listed on the Dublin stock exchange, said results from a well off the coast of Ghana helped prove that the Owo find made in July is a major new oil field.
The positive news follows a difficult few weeks for Tullow as the government in Uganda argues with the oil company about taxes and an election campaign highlights opposition discontent with the relationship between Uganda's long-serving President Yoweri Museveni and the country's oil companies.
Owo is the latest oil field to be discovered by Tullow and its partners in Ghana, following Tweneboa in January and Jubilee in 2007, which is due to start pumping later this year and will turn Ghana into an oil producer.
"The evidence to date would suggest that Owo will rank in line with Jubilee as a significant commercial discovery in its own right," said Goodbody Stockbrokers analyst Gerry Hennigan in a note to clients.
The news "will act as a positive diversion from the rhetoric emanating from Uganda, where the president has launched his campaign to seek re- election in February amid tough talk in terms of dealing with the oil companies", he added.
The new oil was found in a so-called 'side-track well' which is oil industry jargon for a well that is drilled at an angle to an existing well.
The sidetrack well at Owo, drilled 600 metres away from the initial discovery well which found 53 metres of net oil pay, found an additional 16 metres of net oil pay with pressure data indicating the two finds are part of one reservoir.
"The discovery of very material volumes of light oil in Owo and the fact that the oil is concentrated in high quality channel sands greatly enhances our outlook for the efficient future development of both the Owo and Tweneboa fields," said Tullow exploration director Angus McCoss.
Analysts at Merrill Lynch said the results of the sidetrack well raised the estimated proven plus probable oil reserves from Owo to 500 million barrels of oil from 400 million barrels.
Tullow owns half of the deepwater Tano licence where Owo is situated, alongside partners including private US firm Kosmos Energy and US oil producer Anadarko Petroleum. (Additional reporting Reuters)