Tullow Oil to take two partners

TULLOW Oil has confirmed that it will take on both China National Offshore Oil Corporation (CNOOC) and Total as equal farm-in partners on its newly acquired Ugandan assets, once final government approval is granted.

It had been speculated that one of the two industry giants would partner Tullow at the Kasamene field, which it has all but acquired full ownership from Canadian company Heritage Oil. Formal approval of Tullow’s plan is due to be granted by the Ugandan Government in the next few weeks. The three companies will then each own a third of the three block field.

Meanwhile, Tullow yesterday reported a strong operational performance for 2009, although its financial results were down – as expected – pending first oil flows from its headline Jubilee field in Ghana.

The Irish-founded exploration company’s pre-tax profits fell by as much as 93% – from £299 million to £20m – on the back of a lowering of production volumes and commodity prices. Revenue was down by 16% at £582m, operating profit fell by 68% to £95m and earnings per share went from 30.9p to 1.9p.

Tullow has aimed most of its investment at its headline projects in Ghana and Uganda, over the past few years and first production is due to occur in the first of those near the end of this year.

Tullow chief executive, Aidan Heavey said: “The financial results reflect the stage the group is currently at with its key development projects and the investment required to fundamentally transform the business. With first oil from Ghana due later this year, Tullow is now entering a phase that should deliver major production growth from the end of 2010.”

One analyst also pointed out: “For a company at Tullow’s stage of development, the real news is in the operational update.”

The company’s production rate is measured at about 58,000 barrels of oil per day (bopd), but that should easily pass the 100,000 bopd mark in the next couple of years.