Tullow Oil will slash capital expenditure next year and will focus on onshore exploration in East Africa and developing existing finds in Ghana.
The company said it intends to cut its exploration and appraisal budget next year to $300 million from $1 billion.
On the development and production side, Ghana will continue to be the London-based company’s primary focus, contributing “significant value and cash flow” for the group, it said. “Our overall exploration spend will be significantly reduced and will focus primarily on East Africa where we have major basin-opening potential,” said chief executive Aidan Heavey.
Tullow has made several discoveries in Kenya’s northwest, putting the East African country on the path to becoming an oil exporter. Despite that the producer’s shares have tumbled 44 per cent in London this year as offshore exploration wells off Mauritania failed and crude prices crashed.
In total, next year’s capital spending will be $2 billion, which includes $900 million for the TEN project in Ghana, the company said.
Yesterday, the company signed an agreement with Jamaica for offshore oil blocks. It plans to withdraw from the Kudu project in Namibia.