Jubilee Operator, Tullow oil is confident the company’s hedging program will offset majority of losses it is likely to record this year following the decline in the price of crude on the global market.The oil giant who yesterday July, 29th, 2015 announced its half year results recorded a sales revenue of 820 million dollars while its operating profit was 97million dollars, up by 169 percent as compared to 36 million dollars recorded in 2014.
According to the Chief Executive of Tullow, Aiden Heavey, the company’s poor performance can be attributed to the drop in oil prices and asset sales.
He is however confident the company’s hedging program will offset majority of the losses.
” We are making good progress with our major development projects in West and East Africa. With the TEN Project on schedule and on budget for first oil in mid-2016, our West Africa oil production is set to grow to around 100,000 bopd net to Tullow in 2017. We also continue to build an inventory of exploration prospects to provide options for growth in the future”
The oil giant is also hopeful of solid cash generation as its restructuring program nears completion and this is expected to deliver cost savings of 500 million over the next three years.
Specifically on Ghana Tullow says ahead of the Tweneboah Enyera and Ntomme (TEN) project coming on stream, capital expenditure for the first half of 2015 totaled 783 million dollars compared to 1,048 million dollars in the first half of 2014.
However full year forecast for 2015 still remains at 1.9billion dollars.
With the jubilee field producing an average of 105,000 barrels of oil per day, Tullow projects that full year guidance remains 66 to 70 000 barrels of oil per day. But current daily production of oil has however been pegged at 100,000 barrels of oil per day due to a gas compression fault on the FPSO.
Tullow last week announced the challenges on the FPSO which led to it cutting gas exports to Ghana gas will lead to a drop in oil production to approximately 65,000 barrels of oil per day from 100,000 barrels.
Meanwhile work on the TEN wells is also 65 percent complete and is on schedule and on budget for first oil in mid 2016
According to Tullow, the conversion work on the TEN FPSO continues at the Jurong shipyard in Singapore with all major modules now installed with integration work now underway. The TEN FPSO is expected to sail onto Ghanaian waters in September this year.