Tullow downgrades 2019 output guidance as Ghana problems hit

This year is crunch time for Tullow’s East African projects

Tullow Oil said  its Kenya project timeline was “ambitious”.

Tullow Oil said its Kenya project timeline was “ambitious”.

 

Tullow Oil downgraded its 2019 output guidance to 90,000-98,000 barrels of oil per day (bpd) due to problems at its Ghana fields and sees final go-ahead for its Uganda interests in the second half of the year, while its Kenya project teemingly was “ambitious”.

“(Ghana) performance was below expectations due to gas compression constraints on Jubilee during February and a delay in completing the Inaner-10 production well at the TEN field. Both issues have now been resolved,” Tullow said on Thursday.

It had previously expected to produce between 93,000 and 101,000 bpd.

With much focus on Tullow’s three-well drilling programme offshore Guyana, this year is also crunch time for Tullow’s East African projects.

Final investment decisions for its Ugandan project had been planned around mid-year and Kenya by the end of the year, which Tullow called “an ambitious target” on Thursday.

The shipment of a first cargo of Kenyan oil to test the market, which was originally planned in the first half as well, is expected to sail in the third quarter, Tullow said.

In Uganda, a $208 million (€186,000) payment after selling a stake in its onshore fields to Total in a so-called farm-down deal was delayed last year because the country asked for more tax on the deal than expected.

“These discussions are expected to conclude shortly and will enable completion of the farm-down,” Tullow said.

It has reduced its debt from $3.1 billion (€2.7 billion) at the end of 2018 to $3 billion (€2.6 billion) at the end of March.

It has hedged 56,000 bpd this year at a floor price of $56.40 (€50.65) per barrel and 31,000 bpd at $58.68 (€52.70) a barrel for 2020. – Reuters