Tullow to invest $400 million in Ghana project

Tullow to invest $400 million in Ghana project

Tullow Oil plans to invest $400 million this year, mainly on its flagship fields in Ghana, the independent oil and gas exploration and production group announced this on Wednesday.

Forecasting its capital expenditure for this year, Tullow said it would invest $300 million in Ghana, $40 million in Gabon, $20 million in Côte d’Ivoire, $10 million in Kenya and $30 million on exploration and appraisal activities.

The company expects free cash flow to come in at $100 million at an oil price of $80 a barrel, or twice that at $100 a barrel, unchanged from pre­vious guidance.

• Jubilee FPS

For 2022, free cash flow came in at $267 million, up from $245 million in 2021 and in line with forecasts.

Expatiating on the 2023 outlook for Ghana, Tullow said “completion of Jubilee South East infrastructure in the first half of 2023 will mark the end of the current major infrastructure spend on Jubilee.”

Gross production from Jubilee expected to increase to over 100 kbopd with four new wells at Jubilee South East and a further Jubilee producer onstream later this year.

Tullow forecast decommissioning expenditure of $90 million in the UK and Mauritania, with a further $20 mil­lion placed into escrow funds for future decommissioning in Ghana and parts of the non-operated portfolio.

“Decommissioning expenditure is weighted more than 80 per cent to the first half of the year,” Tullow said.

According to the oil company, Jubi­lee FPSO operations and maintenance (O&M) costs were expected to be 23 per cent lower than in 2021, following O&M transformation undertaken in 2022.

Tullow said it plan to go into a long-term gas sales agreement with the Government of Ghana covering both Jubilee and TEN fields.

Commenting, Mr. Rahul Dhir, Chief Executive Officer, Tullow Oil plc said: “2022 saw Tullow successfully deliver against our business plan.

“A high focus on cost control and a disciplined approach to operational efficiency have driven a very strong performance for the year, with group production in line with guidance and expectations, delivering free cash flow of $267 million, lowering net debt to $1.9 billion and reducing cash gearing to 1.3x net debt to EBITDAX.”

He said, “looking ahead, we have multiple catalysts to deliver further profitable growth. There is strong mo­mentum across the portfolio with the commissioning of Jubilee South East on track for the second half of 2023, bringing undeveloped reserves online and Jubilee gross production to more than 100 kbopd before the end of the year.

“Engagements to secure a strategic partner for the Kenya development project continue and we are preparing a plan of development to monetise the remaining resources at TEN.

“We have created a unique plat­form of assets and capability, including industry leading safety performance, which positions us strongly to create significant value for all our stakehold­ers.”

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