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Tullow cuts output, plans Jubilee shutdown in 2017

30 Jun 2016 08:53 (+01:00 GMT)
Tullow cuts output, plans Jubilee shutdown in 2017

London, 30 June (Argus) — London-listed Tullow Oil has cut its 2016 production guidance because of problems on the Jubilee field offshore Ghana, which will be shut in for up to 12 weeks next year.

But the firm's TEN development offshore Ghana remains on course to start up within the next 3-6 weeks. The first cargo of the new grade, a 650,000 bl part cargo, will be lifted by Tullow on 23-24 August. Subsequent liftings will be 950,000 bl.

First-half production at the company's west African assets fell to 51,900 b/d, down from 66,500 b/d a year earlier. And its guidance for the full year has been reduced to 62,000-68,000 b/d from a previous 73,000-80,000 b/d. This is despite the 80,000 b/d capacity TEN project still being expected to deliver a gross annnualised 23,000 b/d, of which 11,000 b/d will be net to Tullow.

Problems with the turret on 120,000 b/d capacity Jubilee field led to a shutdown in April and part of May. June production averaged 90,000 b/d and this level is expected to be maintained for the rest of this year, putting gross second-half production at 85,000 b/d and a full-year average of 74,000 b/d.

The 8-12 week shutdown next year will enable work to take place to reposition the floating production system and move toward offtaking through a deepwater buoy.

In east Africa, Tullow said government decisions to proceed with separate pipelines for crude production in Kenya and Uganda had brought clarity. It is assessing an early pilot oil project for the South Lokichar discoveries in Kenya that could produce some 2,000 b/d in mid-2017.

Tullow reports its second-quarter results on 27 July.