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Tullow Oil's pre-tax profit hits €529m as oil price rises

Company doubles dividends as sales increase to €1.76bn

RISING energy prices and higher production in Ghana helped Tullow Oil to report a seven-fold increase in its annual pre-tax profit and a doubling of its dividend.

The Dublin-listed explorer said yesterday that sales doubled to $2.3bn (€1.76bn) as the average price of a barrel of oil rose to $108 from $78. Pre-tax profit jumped to $689m (€529m) last year from $90m the previous year.

Tullow said it is advancing together with partners Total and Cnooc in Uganda after selling stakes in the company's largest project in East Africa to the French and Chinese companies for $2.9bn.

The three companies will invest "in excess" of $10bn to develop the fields in Uganda's Lake Albert Basin, as well as build a local refinery and an export pipeline to pump surplus crude to world markets.

Tullow, which was set up by former Aer Lingus accountant Aidan Heavey, is expanding its projects in Ghana and Uganda while drilling exploration wells in Africa and Latin America that have the potential to open new frontiers. While Ghana has been driving profits, the company disappointed investors as technical problems delayed production there.

Tullow has "a huge portfolio of opportunities" with exploration and development, Mr Heavey said yesterday.

Opportunities

"We have lots of organic opportunities and we see lots of growth. We do look at acquisitions every now and again," he added. Though "there is nothing on the agenda" for now.

Tullow plans to supply "a few thousand" barrels of oil a day starting from late 2012 to the domestic market from well flow tests. The crude will be used by industrial users to replace fuel imported into Uganda.

Production from the Ugandan fields, which hold an estimate 2.5 billion barrels of oil, will reach more than 200,000 barrels a day, Tullow estimates.

In South America, the company said it is targeting about 1.4 billion barrels of oil and gas resources from three wells off French Guiana.

Tullow, along with partners Royal Dutch Shell and Total, spent more than $250m last year drilling an offshore well, which found light and heavy oil there.

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