Suspension of drilling in Ghana may affect Tullow

Tullow Oil is assessing the impact of an international ruling made over the weekend suspending drilling at its concessions in Ghana. The Government of the west African state has been ordered to suspend further drilling adjacent to existing oil and gasfield development under way in waters whose sovereignty is disputed by its neighbour, the Ivory Coast.

The decision was delivered by the International Tribunal for the Law of the Sea, based in Hamburg, on Saturday following hearings from legal representatives of both countries held in March.

In spite of the ban of new exploration, the adjudication may not necessarily be viewed as bad news for Tullow, which is based in Dublin but London-listed, which is part way through work on the so-called Ten fields caught up in the dispute.

Although the tribunal ruled that further work in the area would be detrimental to Ivory Coast’s interests ahead of a final judgment on where the maritime border lies, it also backed Ghana’s right to continue operations on development already under way.

According to the tribunal’s findings: “The suspension of ongoing activities conducted by Ghana in respect of which drilling has already taken place would entail the risk of considerable financial loss to Ghana and its concessionaires and could also pose a serious danger to the marine environment.”

Both countries were ordered to present further evidence and arguments in May in the next stage in resolution of the dispute which could take until 2017. On Saturday Tullow executives were assessing the impact of the ruling on its ability to push ahead with work at the Tweneboa, Enyenra and Ntomme (Ten) fields under dispute, which Ghana first approved for commercial exploitation in 2013.

– (Copyright The Financial Times Limited 2015)