Tullow output to rise 24%

TULLOW Oil has said exploration will focus on Africa and India this year to boost reserves.

Production will increase more than 24% as output rises in Equatorial Guinea and Mauritania.

London-based Tullow plans to start drilling at 20 exploration wells in 2007, including high-impact programmes in Uganda, Namibia and India, it said yesterday.

Last year, it found hydrocarbons in seven of the 12 exploration wells it drilled.

The company’s output will exceed 80,000 barrels of oil equivalent a day in 2007, up from 64,720 barrels a day last year, it said.

“2007 is expected to be a year of further progress, with strong production performance and three major drilling campaigns,” said chief executive Aidan Heavey.

The company will invest about £370 million (€561m) in development and exploration activities this year, compared with about £330m in 2006, it said. Of that, £60m will be invested in Uganda.

Shares of Tullow, which produces fuel in southern Asia, western Africa and northwestern Europe, on January 15 had their biggest gain in three months after the company’s partner in a Ugandan license, Heritage Oil, found additional petroleum deposits at an exploration well.

Tullow agreed in September to buy Australian firm Hardman Resources for about €656m, boosting reserves by 30% and increasing its output by 6,000 barrels of oil equivalent a day.

The purchase gave Tullow access to oil discoveries in Uganda, Mauritania, Tanzania and French Guiana.

The company was linked this month with a bid for western African assets owned by Devon Energy.

The company’s chief financial officer, Tom Hickey, said he wouldn’t rule out an approach.

“We’re certainly likely to have a look,” he said. “Whether we bid or not remains to be seen.”

Production last year dropped below expectations after Tullow reduced production of British natural gas because of falling prices, Mr Hickey said.