Tullow Oil likely to exit FTSE 100 this week

Beleaguered resources group set to fall out of index after it struggles with plunging oil prices

Tullow Oil was last trading at about 381 pence in London, down by about 52 per cent since March 2014.( Photograph: Brittany Sowacke/Bloomberg)

Tullow Oil was last trading at about 381 pence in London, down by about 52 per cent since March 2014.( Photograph: Brittany Sowacke/Bloomberg)

 

Tullow Oil is set to fall out of the FTSE 100 when the quarterly changes to the blue-chip index are revealed this week.

Analysis by Société Générale, based on Wednesday’s closing prices, sees demotion for the Africa-based explorer after it reported its first pre-tax loss in 15 years last month.

Its place is set to be taken by Hikma Pharmaceuticals, the drugmaker that has been knocking on the door of the FTSE 100 for some time.

Meanwhile Tullow Oil said on Monday that it has been advised by the government of Ghana that the government of Côte d’Ivoire has applied for provisional measures to be ordered in Ghana’s maritime boundary dispute with Côte d’Ivoire, which is in arbitration before a Special Chamber of the International Tribunal of the Law of the Sea (ITLOS) in Hamburg. These measures include a request that Ghana suspends ongoing exploration and exploitation operations in the disputed area in which the TEN project is situated until ITLOS gives its full verdict which is expected towards the end of 2017.

Tullow understands that a decision on this application for provisional measures should be handed down before the end of April 2015.

Aidan Heavey, chief executive officer of Tullow Oil, said that it has conducted its operations in both countries in line with its obligations as a contractor under its Petroleum Agreements and in accordance with international operating standards.

“Although the arbitration process allows for an application of provisional measures, it is our view that it is in the best interest of all parties that the TEN project continues to move ahead without delay and unencumbered by legal tactics of this nature,” he said.

(Additional reporting The Financial Times Limited 2015)