Tullow Oil reports 48% rise in profits to $829m

PROFITS AT Tullow Oil rose 48 per cent in the first half of this year to $829 million (€682 million) on the back of increased production and strong oil and gas prices, the group said yesterday.

The firm has also solved technical problems that slowed production from its Jubilee field, off the coast of Ghana in west Africa.

Production there slowed from 88,000 barrels a day to about 70,000 as a result of difficulties encountered in a number of wells.

Chief executive Aidan Heavey said yesterday the group had come up with a simple and cheap solution to the problem.

The Jubilee field is likely to produce 90,000 barrels a day by the end of this year and reach its peak, 120,000 barrels a day, in 2013, Mr Heavey said. Tullow has a 35 per cent stake in Jubilee.

Figures for the first six months of this year show that Tullow’s revenues during the period were $1.17 billion, a 10 per cent increase on the same period in 2011, when sales were $1.06 billion.

Pre-tax profits rose 48 per cent to $829 million in the first half of this year from $560 million during the same six months in 2011. Earnings per share were up 63 per cent at 60.3 cents.

The group was paid an average price of $110.70 a barrel for oil during the six-month period, down 1 per cent on the $112 it earned during the first half of 2011.

Mr Heavey said he expected Tullow would be paid slightly less for oil in the second half of the year.

However, he pointed out that as the group had to fund large explorations, it hedged prices for around 70 per cent of its production a year in advance.

“We tend to have a fairly stable price as a result,” he added.

The group and its partners, CNOOC and Total are in talks with the Ugandan government about their joint development plans for the Lake Albert rift basin field.