Tullow on course for goals offshore Ghana

Tullow Oil has issued an update on its various programs offshore West Africa and South America.

Jul 31st, 2014

Offshore staff

LONDONTullow Oil has issued an update on its various programs offshore West Africa and South America.

Offshore Ghana, the three-field deepwaterTEN project is on target to deliver first oil in mid-2016. Thereafter production will build steadily toward the FPSO’s capacity of 80,000 b/d by 2017.

Development calls for drilling and completion of up to 24 development wells that will be connected to the FPSO via subsea infrastructure. Development drilling started earlier this year and so far eight of the 10 wells expected to be onstream at start-up have been drilled.

Overall the project is 30% complete with all major contracts awarded, and all work permits in place for installation works to start next year. The conversion of theCentennial Jewel trading tanker into the TEN FPSO continues at the Jurong Shipyard in Singapore.

Cost of the development remains at around $4.9 billion, excluding FPSO lease costs. Tullow continues to work on a partial farm-down of its interest in the project.

At theJubilee field first-half production averaged around 103,000 b/d, in line with expectations. The onshore gas processing facilities that will receive the field’s associated gas are expected to be completed during 4Q.

A bypass line could be added to route a limited quantity of offshore gas directly to the power plant when the gas processing facility is either undergoing maintenance or is not available.

In addition, the Ghana Environmental Protection Agency has consented to flaring of 500 MMcf/month (14 MMcm/month) of gas from the field until the end of October. This should help sustain current production rates ahead of start-up of the main gas processing facility, allowing a subsequent ramp up of oil production from the Jubilee field toward the facility capacity of 120,000 b/d.

OffshoreMauritania work continues on the Banda gas-to-power development following the government’s approval last year of the Banda field development plan. The partners have received bids for engineering, procurement, and construction and pre-award negotiations continue with contractors.

Commercial discussions have still to be completed on the gas sales agreement and associated power purchase agreements.

In March the company declared Force Majeure on its offshore exploration block in Guinea following a US regulatory investigation of partner Hyperdynamics. Force Majeure was lifted in May and discussions continue to resolve this issue.

Depending on the outcome, Tullow expects the Fatala-1 exploration well to start drilling either later this year or during the first half of 2015.

After evaluating its options offshore Liberia and Sierra Leone, Tullow decided to exit licenses LB-15 and SL-07B-11 and will no longer have interests in either country.

Offshore Equatorial Guinea, the addition of recent infill wells at the Ceiba field delivered initial flow rates of 20,000 b/d of oil. A 4D seismic survey is planned around the turn of this year to optimize infill drilling.

At the Okume complex, a 10-well infill drilling campaign is under way and will continue until mid-2016.

Off Namibia, negotiations continue on gas sales from the potentialKudu field development and the Namibian national oil company is looking to farm out part of its upstream equity.

In South America, Tullow continues making preparations to drill the Goliathberg/Voltzberg South exploration well in block 47 offshore Suriname. The company is considering farming down equity in this well to reduce its costs. In block 31 the Spari prospect (non-operated prospect) could be drilled during 2Q 2015.

Offshore Guyana, processing continues of the 3,175-sq km (1,226-sq mi) 3D and 857-km (532-mi) 2D seismic datasets acquired late last year.Geological studies and interpretation of intermediate seismic volumes are under way to generate prospects for the Kanuku block. In late 2015 the partners must decide whether to enter the next period which includes an exploration well.

Finally, the company has received the final processed data of a 2,000-sq km (772-sq mi) 3D seismic survey acquired offshore Uruguay last year. Seismic interpretation and geological studies have started to update the prospect portfolio for block 15, again ahead of a decision on whether to enter the next exploration period with its associated drilling commitment.

07/31/2014

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