Tullow says Ugandan finds may deliver 1bn barrels of oil

EXPLORATION GROUP Tullow Oil believes its interests in Uganda could deliver over one billion barrels of oil, according to a statement issued yesterday.

The Dublin- and London-listed company has already said it has set contingent reserves for its oil fields in the African country at 600 million barrels.

In a management statement yesterday, the company said the basin where it has been drilling could potentially deliver “well in excess of one billion barrels”.

Tullow said important progress had been made in the area between January and May, and pointed out that the threshold for commercial development of its oil finds has been comfortably passed.

Tullow holds three licences on the Ugandan side of the Lake Albert rift basin in east Africa; block one, block two and block 3A.

Yesterday the company said an appraisal programme in 3A completed in February resulted in estimates of the oil contained in the field being upgraded to 200 million barrels.

Drilling in blocks one and two has resulted in four further successful wells, which the company said confirmed the significance of earlier finds in the area.

It began further drilling in the basin this week, while tests at two finds, Kasamene and Kigogole, produced oil flows of between 350 and 3,500 barrels of oil a-day.

The group said yesterday that its operations in the rest of Africa were performing in line with, or ahead of, expectations.

It has been drilling in Gabon, Guinea and recently bought into a licence in Liberia.

In Europe, where it has natural gas-producing fields in the North Sea, its performance was “marginally” below expectations due to what it described as operational difficulties in the Thames field.

Elsewhere in the same region, the company said recent drilling has been disappointing, with delays and under-performance hitting the Murdoch and Boulton wells, while the Bure North well delivered poor results. Its North Sea operations supply gas mainly to markets in southern England.

In Asia, gas production from its Bangora field in Bangladesh remains steady. It sold its gas field in Pakistan for $7.5 million. It plans to begin exploratory drilling in Kohat in the same country in August.

In January, the company raised £400 million through a rights issue. It later arranged a borrowing facility with banks that will allow it to draw down $2 billion.

Its shares closed up over 1.7 per cent at €10.10 in Dublin.