Tullow flags Kenya restart, weak North Sea sale process
Africa-focused Tullow Oil Plc confirmed on Wednesday it had restarted operations in northern Kenya on November 8 after reaching a deal with local leaders to prevent a repeat of protests that halted work last month.
Residents of the remote, poverty-stricken northern Turkana community, supported by a local politician, marched on Tullow operations on October 26 to demand more jobs and other benefits. The government said protesters ransacked one site, which Tullow works on with partner Africa Oil.
Paul McDade, London-listed Tullow's chief operating officer, said the company had agreed to "accelerate" training programmes and other community involvement schemes.
In a trading statement, Tullow also gave an update on a number of key wells worldwide. It flagged a weak market for the mature southern North Sea assets it is trying to sell - extending the process over the next 18 months and breaking up the business to sell it in smaller pieces.
"We realised, having gone through the initial process, the market for those types of assets is a bit weaker than we anticipated. Potential buyers can see the value there but really struggle a little bit to structure the finance around it," McDade told Reuters.
The future health of the North Sea - as its productivity begins to wane and the cost of running aging infrastructure escalates - has become part of a hot political debate on energy prices and supply security in Britain.
Tullow is selling out because it sees itself as mainly an explorer and an opener of new basins.
Tullow said a result on its Tultule 1 well in Ethiopia was expected by the end of November, and that its Fregate well in Mauritania would reach total depth in December.
FRENCH GUIANA ASSESSMENT STAGE
In French Guiana, one of Tullow's big hopes and a closely watched new oil province, Tullow said its Zaedyus-1 had reached total depth and evaluation of the well was ongoing.
Wessex Exploration, a partner in the Guyane Maritime Project along with operator Shell and Total, said the well had been plugged and abandoned after finding no evidence of hydrocarbons.
McDade said this was in line with expectations as the well had been drilled to ascertain the limits of the resource.
The partners now plan to work on integrating and assessing the data collected.
Morgan Stanley analysts said the statement showed good overall progress but little news and maintained an overweight stance. Tullow shares fell 1.7pc to 885 pence, slightly underperforming the broader European oil stocks market .