Tullow Oil would embark on a new phase of its development over the coming months when the bulk of its reserves started to generate revenue, the chief executive said yesterday.

After the company's annual meeting in Dublin yesterday, Mr Aidan Harvey said that in the last few years just 2 per cent of Tullow's reserves were producing revenue. But by the end of 2001, gas and oil from its development blocks in the Ivory Coast and Pakistan are expected to contribute $50 million (€47.75 million) a year to company sales. It is also proceeding with a policy to invest in gas-powered generating stations as integrated projects.

"What we are looking at doing is integrating gas development with power plants and using the expertise of Tullow in developing fields and managing the power plants from a low-cost base," Mr Heavey said.

Becoming an operator of a power plant in Britain, Knapton Generating Station in north Yorkshire, was valuable for the company's "CV" when operating in the Indian sub-continent, he added.

"Locking in" development work in emerging economies with power plant operations was a way of financing both projects. Tullow's sale of gas reserves in the Sari and Suri fields to the Pakistan National Power Authority is planned to begin in October.

"Starting production in Pakistan will be a major step for the company because it means that the reserve base that we have is now starting to generate cash flow," he said.

He added that the company had increasingly focused on India in the past year where there was a huge shortage of gas in a country of almost one billion people. Tullow was now the biggest foreign licence holder in India, Mr Heavey said.

He said the gas sales project in Pakistan and the finalisation of some of the licence applications in India and Bangladesh had been slowed down by the tension between the two countries, the downturn in the oil markets and the Asian crisis.