Tullow makes new discovery in Lake Albert basin in Uganda

DUBLIN AND London-listed exploration group Tullow has made a further discovery in Africa’s Lake Albert basin as it moves ahead with exploration and development plans in a number of countries on the continent.

After beginning drilling there in January, the group encountered oil in Ngassa-2 well, part of the overall Lake Albert basin in Uganda where it has already confirmed reserves of 700 million barrels. The company believes that there is a 60 per cent chance that the Ngassa reservoir could contain up to 600 million barrels.

Tullow’s focus switched in the first half of the year to the development of its finds in Uganda and off the coast of Ghana, a move that saw a 16 per cent fall in production from its existing resources.

Chief executive Aidan Heavey told The Irish Times that work on both projects was on schedule. It spent £333 million (€379.7 million) during the first half of the year on development.

Tullow said it has won key government approvals for its plans to develop the Jubilee field off the Ghanaian coast. It expects oil production to begin there next year.

Following the group’s success in Ghana it has acquired a number of licences stretching along the west African coastline to the Ivory Coast. Mr Heavey said it has begun exploratory drilling at the top end of this region.

Sales from existing production fell 23 per cent in the first half of the year to £291.3 million from £378 million. The fall was partly due to a cut in production and lower prices. Tullow was paid $53 a barrel for oil during the first six months of the year, 34 per cent less than the $80.10 it was paid during the same period last year.

Tullow’s profit before tax was down 81 per cent at £34.8 million from £187.3 million.

During the period, Tullow secured a bank-lending facility of up to $2 billion and £402 million from a share placing.