Tullow discovery is second in two days

TULLOW Oil yesterday announced its second significant oil discovery in as many days.

The Irish-founded exploration company said appraisal studies have found 39 metres of net oil pay and eight metres of net gas pay at the Kasamene-2 well in Uganda.

The news followed Thursday’s announcement of a major oil and gas find in Ghana, which may end up rivalling Tullow’s Jubilee field in that country in terms of production capability.

The Kasamene well is located in Uganda’s Lake Albert Rift Basin. Tullow owns 100% of Block 2, where this find has occurred. Tullow owns 50% of Blocks 1 and 3, whose assets the company is currently hoping to seize control of from its partner Heritage Oil.

Heritage’s shareholders are set to vote on Monday on management’s link-up with Tullow.

The Irish firm last week exercised its pre-emption rights on the assets by matching the $1.5 billion (€1.06bn) bid initially agreed with Italian energy firm Eni. But the Ugandan government will have the final say on who gains control of the two blocks.

For its part, that government yesterday moved to quash media speculation that it would veto Tullow’s plans. It said that no decision had been made and it will still consider both Tullow’s and Eni’s bids for the blocks.

The Ugandan government is against any one company operating as a monopoly at Kasamene, but Tullow is keen to find a downstream partner, should it gain initial total control of the blocks, to help further develop the assets.

Regarding yesterday’s announcement from Tullow, the company’s chief operating officer Paul McDade said that encountering the largest net pay thickness of oil in the region to date is “an outstanding result”.

The Kasamene wells are expected to be put on long-term production tests later this year and the field is set to move into full production mode next year.