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Tullow Finds More Oil in Uganda as U.K. Output Drops

Discussion in 'International Forum' started by MaxShimba, Jul 8, 2009.

  1. MaxShimba

    MaxShimba JF-Expert Member

    Jul 8, 2009
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    By Eduard Gismatullin
    July 8 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with projects in Africa, Europe and South Asia, reported further oil discoveries in Uganda as production fell in the U.K.

    The company found oil at the Wahrindi-1 well, extending the Victoria Nile Delta reserves, London-based Tullow said today in a statement. Drilling is continuing at the Ngassa-2 well where “oil shows have been encountered,” it said.

    The explorer needs to drill a further 1 kilometer (0.6 mile) at Ngassa-2, Chief Financial Officer Ian Springett said by phone. “We had to sidetrack the well and that’s led to a revised date for reaching target depth later in August,” he said.

    Tullow is focusing on field development in Uganda and Ghana to counter a decline in production in Britain, where setbacks in North Sea operations have curbed output. It’s investing about $3.1 billion with partners to start crude extraction at the Ghanaian Jubilee deposit in the second half of 2010.

    The Ngassa-2 well has shales, or rock, which is “quite tricky to drill through, but the more we drill them the more we learn about them,” Tullow Exploration Director Angus McCoss said today on a conference call with investors. “With respect to the sidetrack, there is not significant deviation at all, it’s just basically running alongside the first hole.”
    Tullow has drilled 25 wells in the Lake Albert Rift Basin in Uganda since January 2006, of which 24 found oil and gas, proving in excess of 700 million barrels of resources and exceeding the commercial threshold for the project development, the company said today.

    Declining Production
    The company’s first-half oil and gas output fell 16 percent from a year earlier to an average of 59,000 barrels of oil equivalent a day. Tullow expects to pump 58,000 barrels a day this year, at the lower end of a range it announced in May.

    “With Jubilee still on track for first production in the second half of 2010 and no sign of exploration prospectivity diminishing, the market is again likely to take any production shortcomings in its stride,” Gerry Hennigan, an analyst with Goodbody Stockbrokers in Dublin, said today in a report.
    Tullow has forecast a drop in first-half revenue to about 290 million pounds ($466 million) from 378 million pounds a year earlier, following lower oil and gas prices and sales volumes.

    Tullow fell 3 percent to 863.5 pence in London trading, the lowest price since May 5.

    “It promises to be an exciting second half of the year,” Chief Executive Officer Aidan Heavey said in the statement, citing “high-impact” wells in Ghana and Cote d’Ivoire and the result of the “significant” Ngassa-2 well in Uganda.

    In South America, the explorer has received proposals for a partnership in French Guiana, while seismic studies have revealed “large leads offshore Guyana,” Tullow said. In Africa, “a further two licenses are being acquired elsewhere in the Liberian Basin,” it said.

    To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net
  2. Smatta

    Smatta JF-Expert Member

    Jul 9, 2009
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    Imagine how fast East Africa will develop when Ugandans start producing this oil commercially.. seriously, imagine the business opportunities. The possibilities of Tanzania rejecting the EAC are reducing daily.
  3. Ndahani

    Ndahani JF-Expert Member

    Jul 9, 2009
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    Duuh, oil ya Uganda, Tanzania itikisike!! Kazi kweli kweli.
  4. Smatta

    Smatta JF-Expert Member

    Jul 9, 2009
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    Once the community is fully implemented, the oil will be East Africans, just like the Tanzanite, the gold, kilimanjaro, serengeti, land, lake Victoria and the fish in Migingo. We will share our resources ( I hope). Listen guys, oil is tooo important to be ignored, even if it means giving Museveni the East African presidency for a couple of years just to massage his fragile ego, as long as he feeds us with that crude stuff, then we are good to go.