Wednesday 13 November 2019

Millions at risk for Tullow over Ghana spat with Ivory Coast

Tullow waits on decision today by International Tribunal for the Law of the Sea
Tullow waits on decision today by International Tribunal for the Law of the Sea

Paul O'Donoghue

A boundary dispute between Ghana and the Ivory Coast over an oil field to be operated by a Tullow Oil-led consortium could cost the Irish-listed firm hundreds of millions of euro.

Tullow is the lead operator on the €4.5bn offshore TEN fields, which are expected to add substantially to cash flows and profits that are already derived from its flagship Jubilee field development off Ghana's coast. The field was due to open in mid-2016.

Ghana and the Ivory Coast are locked in a dispute over the field, with the Ivory Coast claiming that at least some of the field lies within its waters. It revived its claim after Ghana discovered oil in 2007.

The International Tribunal for the Law of the Sea is due to rule today on Ivory Coast's February request for a moratorium on activity in the basin. Although many expect the dispute to be ultimately settled in Ghana's favour, the tribunal can halt work until a final judgment is made, which could take two years.

Tullow owns just under half of the TEN project, which is expected to produce up to 80,000 barrels of oil a day.

The firm has estimated that suspending operations in the disputed area could cost $1.2bn (€1.1bn) which would be split between the TEN project partners.

As Tullow has a stake of just over 47pc, it could take a hit of roughly €500m.

Tullow said in March that Ghana has a strong case and expects the tribunal to dismiss the Ivorian request for a suspension. The dispute is a further blow to Tullow, whose shares have already fallen by about half in the past year and which recently cut a third of its Dublin workforce.

Irish Independent

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