Business Irish

Wednesday 25 April 2018

Tullow confirms viability of Kenya well

Tullow Oil Chief Executive Officer Aidan Heavey
Tullow Oil Chief Executive Officer Aidan Heavey
Sarah McCabe

Sarah McCabe

Tullow Oil has announced the viability of a well in Turkana County, Kenya, but still cut its full year production forecasts.

Production at the Irish-owned African-focused mining company jumped in line with expectations, up 14pc. Tullow pumped 88,600 barrels of oil a day between January and June.

But the group still cut its 2013 average production forecast; it now expects to produce an average of 84,000 to 88,000 barrels of oil per day as opposed to a previously predicted 86,000 to 92,000 barrels.

The company wrote of $176m on exploration costs during the period, well below the £451m it paid out in the first half of 2012.

Tullow confirmed the commercial viability of its latest drilling success at the Etuko-1 well in Kenya and said that combined with output from neighbour Uganda, a pipeline could deliver 500,000 barrels a day by 2018.

Tullow also confirmed it is to seek a "development carry" from any future partner in its Ten project in Ghana, where the new investor would pay development costs.

It put the increased cost of developing Ten at $4.9bn, excluding lease costs.

Tullow has had some disappointing exploration results recently but Morgan Stanley said the result was ahead of expectations and that the opening of a new province in East Africa and signs of capital discipline "should address investor concerns and help to drive the shares up".

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