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Tullow posts profit after three years

NEWS
By Fredrick Obura | Feb 7th 2018 | 2 min read
By Fredrick Obura | February 7th 2018
NEWS

NAIROBI, KENYA: Kenya could start exporting oil on commercial scale in the next five years, Africa-focused oil and natural gas producer Tullow Oil said on Wednesday.

Tullow said extended well tests, water injection tests, well interference tests and water-flood trials have proved helpful for planning the development of the oil fields.

“The exploration and appraisal campaign in Kenya has confirmed the presence of substantial oil resources in the South Lokichar Basin. After over six years of hard work, we can now move forward to commercialising these low cost resources through a phased development of the basin involving a central processing facility and an export pipeline to the Kenyan coast,” said Mark MacFarlane, Executive Vice President for East Africa.

“In 2018, we will focus on taking the project towards Final Investment Decision (FID) in 2019 with a prudent and flexible plan of execution that can take advantage of low oil services costs and deliver first oil and cash flow as soon as possible. With good progress being made in Uganda towards FID, East Africa is on the verge of becoming a major oil exporting region.”

The company reported an operating profit of $22 million for the year ended December 31, compared with a loss of $755 million in 2016. Analysts were expecting a loss of $103.6 million, according to company-compiled consensus.

Tullow said working interest production was 32 percent higher at an average of 94,700 barrels of oil equivalent per day (boepd) in 2017. It forecast 2018 production in the range of 86,000 to 95,000 boepd.

Plans by Government to export crude oil produced in Turkana County on a pilot basis were last year delayed to 2018.

Tullow Oil, which will undertake the pilot project on behalf of the Government, last year said trial would kick off early 2018.

The Ministry of Energy and Petroleum had planned to start exporting through the Early Oil Pilot Scheme (EOPS) in June 2017 but it was called off owing to unpreparedness.

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