Tullow Oil government payments decrease by 30%

Tullow Oil paid a net $209m (€183m) to various governments in Africa and Europe last year by means of taxes, royalties, production entitlements, licence fees and infrastructure improvements.

Tullow Oil government payments decrease by 30%

That figure marks a reduction of just over 29% from the $295m paid in 2015; largely driven by the drop in global oil prices.

The Irish-founded exploration company is chiefly focused on Africa but has a narrow interest in Europe. In all, it has around 100 exploration and production licences across 18 countries.

Earlier this week, Tullow’s new chief executive Paul McDade said his focus will be on financial discipline. Next month, Tullow is set to report a $100m improvement — to $300m — in first half gross profits, but a $600m impairment hit brought on by deflated oil prices. Elsewhere, Russian-focused Irish explorer PetroNeft Resources has reported a narrowing of annual losses. The company made a loss of just over $5.4m last year, down by 36% on the $8.5m losses seen in 2015. PetroNeft – which is due to start a new drilling round in the coming weeks - upped its production levels from its Siberian-based licences during 2016, despite what it called “a challenging year”.

Chief executive Dennis Francis said the current year continues to present challenges, “but also some grounds for optimism”. He added the company – in tandem with partner Oil India — is considering further asset growth.

“Together we see opportunities to strengthen and grow our company through development and possibly acquisition,” he said. Oil prices, meanwhile, were headed for their longest run of gains in six months as a drop in US crude production and gasoline stockpiles raised confidence that OPEC-led supply curbs might finally be working to reduce a glut.

Brent crude was up 15c to $47.57 per barrel. But while prices have surged this week, oil in New York and London were still set for a loss in June - a month in which prices typically gain. Crude futures tumbled into a bear market last week on concerns that rising global supply is offsetting cuts from the OPEC and its partners.

“Doubts will linger over the staying power of this rally and several stumbling blocks still lie ahead of the price recovery,” said London analyst Stephen Brennock.

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