Tullow Oil is making waves in the energy sector. As its offshore Ghana oil production rises, the company eagerly steps into a cash-harvesting phase. With debt reduction and efficient spending, they’re scouting for ways to expand.
In Ghana, Tullow Oil has two mainstays. They run the Jubilee FPSO and the TEN FPSO. Since its start in 2010, the Jubilee field has stood out as a major oil discovery in West Africa. Meanwhile, the TEN project, including the Tweneboa, Enyenra, and Ntomme fields, began its journey in 2016.
A major milestone was hit in July. Tullow Oil wrapped up the Jubilee South East project, bringing three fresh production wells and a pair of water injection wells into the Jubilee field. This move jumped the field’s output: 108,000 barrels daily, significantly climbing from 72,400 barrels in the year’s initial half. Predictions suggest an average of 90,000 barrels daily for this year, with 35,000 barrels belonging to Tullow Oil.
However, the TEN project has its hurdles. Complex reservoirs and operational hiccups have been challenges. Its first-half yearly production was 20,000 barrels daily, with Tullow Oil owning 8,600 barrels. Yet, the company is proactive. Plans to enhance the TEN project’s performance, such as gas monetization and facility tweaking, are in the pipeline.
CEO Rahul Dhir shared insights. Tullow Oil has emphasized smart investments, operational efficiency, and disciplined capital use for over two years. He stated, “We’re entering the harvesting mode, aiming to generate about $800mn free cash flow between 2023 and 2025.”
Their plan? Harness this cash flow to decrease debt, which was at a whopping $1.9 billion as of June. Moreover, they’re keen on sculpting a lasting capital structure. Their ultimate goal is value creation for stakeholders, the nations they operate in, and their workforce.
CFO Richard Miller also weighed in. The vision for 2025 is to be a business with minimal debt. While the company is looking for external growth chances, they’re selective and chooses only those competing with its internal plans.
Tullow Oil sold its Guyana stake to Eco Atlantic in a strategic move. They now fully own Kenya’s Lokichar Basin and are searching for partners and government nods for an actionable plan.
Tullow Oil isn’t alone in Ghana. It’s in the company of oil giants like Eni, Kosmos Energy, and Aker Energy. With its Jubilee discovery, Ghana has firmly planted its foot in Africa’s oil production landscape. This booming oil sector has fueled its economic ascent. However, it’s not without challenges, like managing revenue, environmental considerations, and local content mandates.
Source: Energy Voice
