Tullow progresses on Jubilee, Norway exit

November 9, 2016

Tullow Oil is moving to get its Jubilee project offshore Ghana on track by year-end, as it firms up plans to divest all of its Norwegian assets by 1H 2017.

Image from Tullow.

“We have made good progress with the Turret Remediation Project at Jubilee and coverage has been affirmed with our insurers for the repair and business interruption,” Aidan Heavey, Tullow CEO said. “As we exit 2016, we are well placed to begin the process of both refinancing and paying down our debt in 2017 while also focusing on growth through our exploration programs in Africa and South America and the commercialization of our assets in East Africa.”

Jubilee

The Jubilee field’s 2016 gross production remains unchanged at 74,000 b/d, 26,300 b/d net for Tullow, taking into account the downtime associated with the Jubilee turret issue and subsequent remediation. 

Tullow reported that gross production from Jubilee has been steady at around 100,000 b/d since August, as revised operating procedures continue to be effective.

“The Jubilee Turret Remediation Project is progressing as planned. The interim spread-mooring of the vessel on its current heading is on track to be completed by the end of 2016,” Tullow said. “The next phase of the project involves spread mooring the FPSO in its permanent and optimum heading position.”

Tullow is working with the government of Ghana on finalizing the details of the FPSO phase, as it remains on schedule to be completed in 2017.

Tullow said the work is likely to result in up to 12 weeks of production shut down in 2017.

TEN

Tullow saw first oil at the TEN field offshore Ghana during Q3 2016, on 18 August.

The field’s 2016 average gross production is now expected to be 15,000 b/d, 7100 b/d net to Tullow, following a slower than expected ramp up during the ongoing commissioning of the facilities.

Gross field production is currently around 50,000 b/d and the first offtake of 650,000 bbl was completed on 6 October.

“Commissioning of the oil production, gas compression and water injection systems is ongoing and all systems are expected to be fully operational by year end,” Tullow said. “Production ramp up has been slower than expected due to water injection commissioning taking longer than planned, which has limited the volume of water injected to date. This is in the process of being resolved and the system is now able to inject water at the design capacity.”

In early October, Tullow declared force majeure under the West Leo drilling contract with Seadrill. Seadrill has commenced legal proceedings to dispute Tullow’s declaration of force majeure, which Tullow will defend strongly, the company said.

South America

In South America, Tullow completed a drop core survey in Block 54, offshore Suriname and results will be evaluated alongside 3D seismic which was acquired in 2015.

Preparations for drilling the potential high impact Araku prospect (Tullow: 30%) in the same offshore block in 2H 2017 are ongoing, the company confirmed.

Plans are also under way to acquire 3D seismic offshore Guyana, Uruguay and Mauritania and to complete a further 2D seismic program in Jamaica in 2017, Tullow said.

Norway

The divestment of the Norway business has progressed well, with the sale of four licenses, including the Wisting discoveries, to Statoil and eight licenses, which include the Oda asset, to Aker BP, expected to be complete by the end of year.

Tullow said it expects to conclude the disposal of its remaining Norwegian assets by 1H 2017.

Read more:

Seadrill disputes Tullow force majeure

Statoil to up Wisting, NCS stakes in Tullow deal



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