Tullow Oil's chief financial officer, Les Wood, has signalled that the company could still make money even in the unlikely scenario of oil prices falling by more than 25 per cent.
Speaking in an interview with Bloomberg TV on Thursday, Mr Wood said Tullow is “fit and we work” even if oil was trading at $50 a barrel. That’s 27 per cent below where West Texas Intermediate oil futures, a key benchmark, were trading as the executive spoke, at $68.8 a barrel.
While oil prices have surged by more than a third in the past 12 months, Mr Wood said he saw them strengthening further in the short term as demand continued to grow, while there are supply concerns in Iran and Venezuela.
“Put those two things together and that’s why we see the price being underpinned,” Mr Wood said in the interview, adding that Tullow, which is focused on exploration in Africa, had worked in recent years to restructure its balance sheet and lower debt, and “can now focus on getting back to growth”.