Tullow Oil upbeat on 2022 production as it focuses on Ghana fields

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Irish-listed oil and gas explorer Tullow Oil expects to maintain 2022 production at 59,000 to 65,000 barrels of oil per day as it concentrates on assets in Ghana.

Ahead of the company’s annual general meeting in London on Wednesday, Tullow said it was making good progress on its portfolio and was carefully managing costs.

Chief executive officer Rahul Dhir said it has been a “transformational year” for the company.

He said Tullow was preparing to take “advantage” of opportunities in Africa as other firms in the oil and gas sector shift their focus away from the continent.

“As a responsible operator with a long history in both west and wast Africa, Tullow is uniquely positioned to benefit from the opportunities presented by this period of flux,” Mr Dhir said.

“We have the clear potential to grow our business both organically and inorganically and I strongly believe that Tullow can and will deliver substantial value to all our stakeholders in the coming years,” Mr Dhir said.

The oil and gas group has interests in over 40 exploration and production licences across 11 countries.

Last year the firm turned its attention to its interests in Ghana, saying it was also looking for a partner in Kenya and exploring a well in Gabon.

Tullow began its multi-year drilling programme in Ghana in April 2021, and is set to bring on stream more wells this year at the country’s Jubilee and TEN fields. 

Last year it successfully pre-empted the sale of Occidental Petroleum’s interests in the Jubilee and TEN fields to US-listed Kosmos Energy, increasing Tullow’s net share of daily production at the two fields by around 4,000 bopd

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The firm is planning to drive a further reduction in costs by taking control of a floating production, storage, and offloading vessel at Jubilee from Japanese contractor MODEC.

There is also “very significant gas resource” in Jubilee and TEN, Mr Dhir said, with “active discussions” ongoing with partner firms and the Ghanaian government.

The company is also exploring the Tano Basin, which spans Ghana and Côte d’Ivoire.

“Combined with the progress we expect to make with our carbon offset projects, Tullow will continue to be a leading investor in Ghana with an integrated offer across oil, gas and local content,” Mr Dhir said.

Davy analyst Colin Grant said there was continued strong demand in the global oil and gas markets after a period of “underinvestment”.

“We feel that the oil and gas sector and indeed all commodity-related assets are poised for a decade of strong relative performance following an equivalent period of underinvestment and neglect by investors that has left valuations at near-record low leaves relative to the market,” he said in a note Wednesday.

Tullow Oil reported a loss after tax for 2021 of $81m (€74m), due exploration costs, impairments and restructuring, a narrowing of its 2020 after-tax losses of €1.2bn.

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