Tullow Pins 2019 Hopes on Guyana

Irish Tullow Oil is pinning its upstream hopes this year on the Orinduik licence offshore Guyana, which it operates with a 60% stake, it said in a trading statement January 16. Its partners are Eco Atlantic and possibly French Total, if the latter farms in to Eco Atlantic's 40% stake.

Tullow will drill the Jethro prospect in Q2 as the first of two planned wells on the Orinduik block; and the Carapa prospect will be tested on the Kanuku licence in Q3. It will be hoping to replicate ExxonMobil's success offshore Guyana, which have so far been giant oil discoveries. 

Eco Atlantic has reportedly said Orinduik shares many of the characteristcs of the Hammerhead-1 area where ExxonMovil has announced a series of finds.

Tullow CEO Paul McDade said: "Tullow is well-placed to deliver on its growth ambitions. In 2019, we will increase oil production in west Africa, target final investment decisions in east Africa and drill the first wells in an exciting exploration campaign in Guyana. Despite a volatile oil price, Tullow's improved balance sheet, low cost production and strong cash flow generation, even at lower oil prices, will allow us to both invest for growth and pay a sustainable dividend."

This year's capital expenditure is expected to total $570mn, comprising Ghana capex of $250mn, exploration and appraisal spend of $140mn, West Africa non-operated capex of $100mn, Kenya pre-development expenditure of $70mn and Uganda post-completion Tullow costs of $10mn.

This is up from last year's $425mn, which itself is $35mn lower than forecast at the start of the year following savings, farm-downs and some work programme deferrals.  

Ghana’s TEN fields performed well throughout 2018 with gross production averaging 64,500 barrels of oil/day, of which 30,400 b/d are net to Tullow, in line with expectations. Tullow expects gross oil production from the TEN fields in 2019 to step up significantly to around 83,000 b/d. Gross gas production is expected to be around 2,100 barrels of oil equivalent/day, of which 1,000 boe/d are net to Tullow.