Tullow urges tax regime clarity
Speaking ahead of the company’s Irish shareholders’ meeting in Dublin yesterday, Tullow chief executive Aidan Heavey noted that the company examines every licensing round opened here and likely will again when the next one — for waters off the west coast — is as expected launched later this year.
However, he noted that Tullow remains specific in what geological plays it goes after and said that, with nearly 85% of revenues emanating from Africa, the company’s main focus will be on boosting production from its eastern African onshore assets — in Uganda and Kenya — in the next four years and increasing its offshore western African production by 2016. By that stage, commercial flows from Tullow’s next big producing asset, the $5bn TEN project offshore Ghana, should have started.
Tullow has got back on track regarding its disposal and farm-out plans — it reached agreement on the sale of two of its North Sea gas assets earlier this week — with market demand for exploration assets picking up again. Mr Heavey said Tullow remains on schedule to complete the farm-down of TEN, reducing its stake from almost 48% to nearer 30% this year.
He also predicted a fresh cycle of consolidation in the global exploration industry, but maintained — despite rumours in recent months — Tullow will not be a participant; meaning it’s not looking to buy anyone and is not for sale. “We’re not an acquirer anymore. We generate our own fields, find and develop oil ourselves and have our own assets, and our business model will remain the same.”
Regarding Ireland’s exploration tax regime — currently under review — he said any country’s terms should only be changed when commercial oil is found and should be generous and incentivised until then. Above all, he said the Government should remove confusion over tax terms and make them clear to prospective market entrants.
