Tullow discovers first crude oil off Norway

Tullow Oil discovered its first crude off Norway after at least 10 unsuccessful wells this year.

The company, together with partners, including OMV and Statoil, made the “breakthrough oil discovery” with the Wisting Central exploration well in the Barents Sea, Tullow said. The Hoop-Maud Basin find may hold from 60m barrels to 120m barrels of recoverable crude, said the London-based explorer.

“The discovery is a basin-opener with upside potential” of as much as 500m barrels, Oswald Clint, an analyst at Sanford C Bernstein & Co, wrote in an e-mailed report.

The discovery follows the $372m (€282m) acquisition of Spring Energy last year. Globally, the company drilled at least 10 unsuccessful wells this year, including the Augunshaug in Norway last month, Tudor, Pickering, Holt & Co said on Aug 29. This week, Tullow and Statoil said the Buzio-1 exploration well in Area 2 offshore Mozambique was dry.

Tullow rose 3.6%, the biggest gain in two months, to 1,070p by the close of business in London.

Separately, Tullow expanded in Namibia after securing a stake in the EL 0037 permit from Pancontinental Oil & Gas, the Australian company said in a statement.

The discovery “serves to reverse recent exploration disappointments offshore Mozambique, Ivory Coast and French Guiana and delivers the first tangible value from the Spring Energy portfolio”, said Gerry Hennigan, an analyst with Goodbody Stockbrokers in Dublin.

“The announcement from Pancontinental demonstrates that Tullow’s appetite for new exploration acreage is undiminished.”

— Bloomberg