TULLOW Oil is relying on its enlarged exploration portfolio and an extensive drilling programme to support a stronger share price next year, according to its chief executive, Mr Aidan Heavey.

Speaking to shareholders at the annual general meeting in Dublin yesterday, Mr Heavey said that, while the share price followed a fairly constant trend last year, it had performed below expectations.

However, the company was now confident that this weak performance could be reversed, he said. "We have had to increase our portfolio and are now involved in several programmes of drilling. Hopefully by next year we will have managed to make it up. The target for this company over the next three years is to deliver capital gains."

Tullow had expanded its operations since last year to achieve a better balance and to give the potential for better upside in the future, Mr Heavey said. The Indian sub-continent would continue to be the group's main focus, with Bangladesh, in particular, expected to be a "very prolific" area for gas.

"The potential here is enormous. We are very confident of the potential in Bangladesh to deliver large volumes of gas," he said.

Tullow has applied for several new licences in this region, where the market for gas is considerable. It is also close to completing four licensing contracts in India, with operations likely to start in the medium term.

The company continues to be the largest licence holder in Pakistan, where it currently has four commercial discoveries.

The disappointing Sara discovery, which was a setback to the share-price last year, turned out to be "just one of the hard luck stories" in the exploration business. "If it had been a success, the company would have mushroomed in size, but that's the oil and gas business," said Mr Heavey.

The company, which found low-quality gas at Sara, has now commissioned a study to ascertain whether it can be made commercially viable. So far, this research suggested there might be some possibilities for the company to develop that site, he said.

Its exploration activities were also continuing in Africa, he said. Tullow had also recently won two licences in Romania, which could have "significant" potential.