header('Content-type: text/html; charset=ISO-8859-1'); Total to be named new owner of Tullow Ghana and operator of Jubilee Oilfield - News Guide Africa
News Uncategorized

Total to be named new owner of Tullow Ghana and operator of Jubilee Oilfield

Image result for total and tullow

Adnan Adams Mohammed 
Information gathered by www.newsguideafrica.com is that, Tullow Oil Ghana (Operator of Jubilee Oilfield) is in search of a new owner in Ghana with the most probable being Total Oil – the French giant, whose operations overlap all of Tullow’s assets.
It is established that Total, unlike Tullow, has a strong reputation as an efficient offshore operator and also has links to cash-rich Qatar Petroleum. This news is breaking in the same week that Tullow Oil shocked the oil world when the Chief Executive Officer, Paul McDade and Exploration Director, Angus McCoss, all Board Executive members, resigned with immediate effect by mutual agreement over underperformance over the years. Tullow also suspended dividend payments.
A Financial and Energy Expert is of the view that, although all is not gloomy with the current operations and production at the oilfields in Ghana; Tullow still has one of the world’s best assets in Jubilee Oilfield – a low-cost producer and now considered a brownfield and a cash cow.  However, Tullow has to transform from an exploration to a matured producing company; this will mean major restructuring and massive layoffs.
“Let’s hope Ghana government will stand firm to ensure that the right “fat” is cut – mainly expensive unnecessary head office staff and expatriates, NOT the highly qualified lower-paid Ghanaians”, Alex Mould, former Chief Executive of the Ghana National Petroleum Corporation.   
Mr Mould further admonished that, the partners should make sure, the Operator of Jubilee Field (Tullow) eliminates those “unnecessary highly paid cushy jobs at their CHISWICK Head Office”, whose time writing charges are suspected to be inflating the cost of oil production of their Ghana operations.
In the meantime, “the Ghana government needs to negotiate with the contractor group partners to ensure that there are minimal Ghanaian casualties at Tullow Ghana Limited — a Company registered in Jersey, UK and indirectly owned by Tullow Oil plc, through its Dutch subsidiary”, he added
Jubilee offshore oilfield was discovered in 2007 by Kosmos Energy and developed by Tullow Oil. 
Equity partners of the Deepwater Tano block are; Tullow with 49.95%, Kosmos with 18%, Oxy with 18%, PetroSA Ghana with 4.05%, and Ghana National Petroleum Corporation (GNPC) with 10%.
While West Cape Three Points is held by Tullow with 22.9%, Kosmos with 30.88%, Oxy with 30.88%, PetroSA Ghana with 1.85%, GNPC with 10%, and EO Group with 3.5%.
According to experts, it is imperative that the government of Ghana has emergency meetings with the top echelon of Tullow to discuss: the quantum of investment needed in Greater Jubilee to sustain production average of 100+ kbbl/d levels; Tullow’s ability to meet cash calls for further development drilling giving their balance sheet challenges; and Tullow Oil Plc giving the Ghana business – Tullow Ghana Limited – the autonomy needed to properly manage the Jubilee and TEN assets as against driving these businesses to provide, at any cost, the needed cash flows to sustain Tullow Oil Plc’s ambitions in Guyana and in East Africa.
It is believed that Tullow’s unsuccessful forays into East Africa is the main reason for the strain on Tullow Oil Plc’s fragile balance sheet. Tullow’s next hope was Guyana, but miscommunication of the type of oil and the difficulties associated with producing it have caused investors to lose hope on this once shining beacon in the E&P world.
Meanwhile, the London-based International Oil Company on Monday noted that, “Whilst financial performance has been solid, production performance has been significantly below expectations from the group’s main producing assets, the TEN and Jubilee fields in Ghana.”
The company’s production for next year is pegged at 70,000 to 80,000 barrels a day, down from the 87,000 a day expected for this year. As well, production for the next three years will hover around the bottom of that range.
“This is likely to have a negative impact on the valuations of Tullow’s key assets,” Al Stanton, an analyst at RBC Europe Ltd., said in a note. “We expect the pace of exploration activity, and therefore news flow, to be reined in.”
The executive departures come after a year of disappointments at Tullow, where technical difficulties have hampered output in Ghana, projects in Uganda and Kenya have faced delays and results from wells in Guyana missed expectations. The company reduced its 2019 production forecast several times as the glitches in Ghana dragged on.
The shares sank 57% to 60.64 pence as of 10:28 a.m. London time, the biggest decline since they started trading in the city 30 years ago. The stock has dropped 66% this year and more than 90% since 2012. Tullow’s dollar notes due 2025 declined the most since they were issued in March 2018.
“There is a risk that the market will lose sight of the true value of our underlying assets,” interim Chairman Dorothy Thompson said by phone, insisting that the Jubilee development and Uganda reserves remain world-class oil fields. The company is conducting a review “to create a sustainable business, which we believe we can do,” she said.
Thompson declined to comment on whether Tullow is actively seeking buyers but reiterated the standard position that the company would always be open to any offers that were attractive to shareholders.
Mark MacFarlane, executive vice president of East Africa and non-operated, has been appointed a chief operating officer in a non-board role, according to a Tullow statement. Les Wood continues as a chief financial officer. The board has started a process to find a new CEO and is talking to internal and external candidates, Thompson said.
The company will reduce capital expenditure, operating costs and corporate overheads, it said. It sees underlying free cash flow next year of at least US$150 million at US$60 a barrel after a capital investment of about US$350 million.
CFO Wood said that Tullow is in a “strong financial position” and that “reducing our debt pile will continue to be our priority.” He conceded that “in the short-term, it will be going a little slower.”

Related Posts

Leave a Reply

Your email address will not be published.