Tullow Oil plans to boost spend on fields
TULLOW Oil, the Dublin-listed developer of African oil fields, may invest more than the £990m (€1.15bn) it expected to spend this year as it increases production in Ghana and Uganda.
"Probably that will be a little bit more the way things are going this year," Paul Burden, the company's principal geoscientist, said at a conference in South Africa yesterday.
"About 85pc of Tullow's global spending will be in Africa where oil finds have exceeded expectations," he said.
Tullow has 93 licences globally and is active in 15 African countries.
It produces nearly 60,000 barrels of oil or equivalents a day and expects to increase that to more than 100,000 barrels a day from the middle of next year when its Jubilee project in Ghana starts. Tullow's current African production accounts for 38,500 barrels a day of the total.
In Uganda -- where Tullow is developing oil and gas fields -- tax disputes with the government relating to Tullow's $1.5bn purchase of Heritage Oil's stakes in two blocks this year "do not affect the planned partnership with Total" and China National Offshore Oil, Burden said, adding that the deal has "basically been approved" by the government.
Tullow warned last month that the disagreement over tax payments may delay projects in the country where it plans to develop the Lake Albert fields with Total SA and China National.
The dispute is "between the government and Tullow now that Heritage has exited", Burden said.
About $128m (€93.9m) has already been paid, and negotiations over the remaining $281m (€206m) are continuing, he said.
Ugandan Finance Minister Syda Bbumba said last week the government expects to resolve the dispute soon.
Tullow expects the Lake Albert partnership to start commercial gas output from the Nzizi field and first commercial oil production from the Kasamene field in the fourth quarter of 2011.
It could produce more than 200,000 barrels a day oil equivalent in Uganda in 2014 or 2015, he added. (Bloomberg)