Wednesday, March 9, 2011

Ghana Fields Could Produce 250,000 B/D By '14-Tullow

By James Herron

LONDON (Dow Jones)--Offshore Oil fields in Ghana operated by Tullow Oil PLC (TLW.LN) could more than double production to 250,000 barrels a day by 2014, the company said Wednesday.

Tullow's first field offshore Ghana, Jubilee, started in November and should be producing 120,000 barrels a day by July, the company's Chief Operating Officer Paul McDade told Dow Jones Newswires.

A previous Tullow statement issued in November had said that the field would hit 120,000 barrels a day within three-to-six months, or by May 2011.

The second major oil development offshore Ghana, of the Enyenra and Tweneboa fields, could produce between 75,000 and 125,000 barrels equivalent per day and start up in 2014, the company said. Tullow still has some appraisal work to do on these fields, but hopes to be able to sanction their development by the end of this year, McDade said.

It is possible that a third development cluster, closer to the Jubilee field, could be added by 2014 and produce 50,000 to 60,000 barrels of oil a day, he said. In February, Tullow announced a new discovery offshore Ghana.

Tullow should be able to easily hit the target of doubling its Ghana output within four or five years, based on existing discoveries, said Bank of America Merrill Lynch in a research note.

Gas produced from the fields will initially be reinjected into the reservoirs to enhance oil recovery, but will also be transported to Ghana for domestic use once infrastructure is in place, Tullow said.

Tullow said it expects its new oil from the Jubilee field to push its total production in 2011 to between 86,000 barrels equivalent a day and 92,000 boe a day, from 58,100 boe a day in 2010. Tullow also said its net profit for 2010 more than doubled to $54 million, mainly due to higher oil prices.

"Based on the current oil price and production coming from Jubilee, in 2011 our revenue will more than double," said Tullow's Chief Financial Officer Ian Springett.

The first cargo from Jubilee was sold a few months ago at a discount to the main crude benchmark, Brent, said Springett. However, demand for light oil from West Africa has increased following the Libyan supply disruption and Tullow expects the second Jubilee cargo to sell at close to parity with Brent and the third cargo to sell at a premium, Springett said.

Tullow shares were down 20 pence Wednesday at 1001GMT , or 1.4%, to 1440 pence.

-By James Herron, Dow Jones Newswires;

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