Tullow Oil Plc says it was prompted to reset the business in order to deal with the effects of the uncertain market situations as it labored deliver on key operational goals in 2015.
The observations were made by Tullow’s Chief Executive Aidan Heavy as published in the company’s operational activities and trading Statement for the Financial year ending December 31, 2015.
Tullow noted with great gait that Upstream, Midstream and Down stream activities in West Africa sauntered progressively through out the year and delivered significant financial results of about $ 1 billion pretax operating cash flow.
“Strong West African oil production supported by a significant hedge programme delivered pre-tax operating cash flow of $1 billion,” he said.
Heavy also noted that the company has made steady progress in Ghanaian Tweneboa-Enyenra-Ntomme (TEN) Project and it estimates production of 100,000bopd for west African fields by 2017.
“We also made excellent progress on the development of the TEN Project which is on track to begin production in the middle of 2016 and we expect the Group to be producing around 100,000 bopd in West Africa in 2017,” he noted.
In East Africa, the company noted that it has made progress on development planning in Kenya chief of which includes completion of the appraisal drilling campaign in 2015, including the successful Amosing and Ngamia Extended Well Tests, underpins a 2C resource base of 600 mmbo.
The Etom-2 result and surrounding prospectivity support an upside potential of 1 billion barrels of oil in the South Lokichar Basin. The draft Field Development Plan was submitted to the Government of Kenya in December and will inform discussions the company progress towards potential Final Investment Decision (FID) of both the Kenya and Uganda upstream development projects in 2017.
Tullow says the bilateral agreement was reached between the Presidents of Uganda and Kenya in August 2015 and adopting the Northern Kenya route for the regional crude oil pipeline, though “subject to certain conditions” was also a step in the right Direction .
“These conditions, which include ensuring that this is the lowest cost route, are being worked on by both Governments in conjunction with the Kenyan and Uganda upstream parties,” the company expressed optimism.
However, in October The government of Uganda entered a memorandum of Understanding (MOU) with Tanzania to commence studies on an alternative Crude oil export Pipeline from Hoima to Tanga Port In Tanzania a thing which undermined the earlier announcement by the two heads of state.
Despite challenge and current low oil prices, Tullow says it expects to maintain sufficient liquidity throughout 2016.
“The Group starts the year with financial headroom of $1.9 billion, is benefiting from a significant hedge position, will see West Africa oil production increase with TEN first oil and will continue to focus on reducing costs and capex across the portfolio” it said